December 8, 2023
By Sharan Kaur Phillora
In a decisive move to combat fraudulent activities in the cryptocurrency sector, the Securities and Futures Commission (SFC) of Hong Kong has taken stern action against two crypto entities, the Hong Kong Digital Research Institute (also known as HongKongDAO) and BitCuped. This crackdown, announced on December 6, 2023, was a collaborative effort with the Hong Kong Police Force aimed at shielding potential investors from falling prey to illegitimate investment schemes.
Here’s what we know:
The SFC’s investigation uncovered that HongKongDAO might have been disseminating misleading information online, which could lead individuals to believe that their services were fully licensed and legitimate. Particularly alarming was the promotion of the HKD token by HongKongDAO, which seemed to be an attempt to attract unwary investors under the guise of a legitimate opportunity.
Similarly, serious misrepresentations were found on BitCuped’s website. The platform falsely claimed that Laura Cha and Nicolas Aguzin, who are actually executives with the Stock Exchange of Hong Kong, were serving as its Chairman and CEO, respectively. This deceptive information was deemed particularly concerning as it could easily mislead potential investors about the credibility and legitimacy of BitCuped.
In response to these findings, the SFC has blocked access to the websites of these entities to prevent potential investment scams. Additionally, the SFC issued cease-and-desist letters to the operators of these websites, emphasizing its commitment to safeguarding investors from potential fraud and unauthorized investment activities in the crypto space. This action underscores the SFC’s proactive stance in addressing the risks associated with digital assets, given the rapidly evolving nature of the cryptocurrency market.
Moreover, these developments align with Hong Kong’s broader efforts to strengthen its regulatory framework in the digital currency space. In October, the SFC announced plans to revise its policies on digital currency sales and requirements, reflecting the rapidly evolving market and industry feedback. Starting in June 2024, cryptocurrency exchanges in Hong Kong will be required to obtain a virtual asset service provider license from the SFC. This marks a significant step towards more stringent regulation and oversight in the cryptocurrency sector.
The SFC’s recent actions and policy updates highlight the need for investors to remain cautious and conduct thorough research before engaging with crypto platforms. The heightened regulatory oversight aims to foster a safer and more trustworthy environment for cryptocurrency investors.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.
