SFC Issues Warning on Unregulated Virtual Asset Platforms
Binance has announced that stock tokens will no longer be available on its website for purchase after SFCs statement.
Following the ban on Binance in Italy, Japan, Germany, UK, and US, Hong Kong has also banned the crypto exchange. The Securities and Futures Commission (SFC) said,
“No entity in the Binance group is licensed or registered to conduct ‘regulated activity’ in Hong Kong.”
Soon after this statement, Binance announced that stocks will not be available on its website for purchase and support will end on October 14 for the previously issued tokens. SFC has shown suspicion that Binance might be offering investors in Hong Kong some trading services. The regulator stated,
“The SFC wishes to make it clear that no entity in the Binance group is licensed or registered to conduct “regulated activity” in Hong Kong.”
As per the Securities and Futures Ordinance (SFO), stock tokens are considered as securities and they are subject to SFC’s regulatory remit.
Cryptocurrency exchange Binance not licensed to sell stock tokens in Hong Kong, says markets regulator SFC https://t.co/SzozUb4xku
— SCMP News (@SCMPNews) July 16, 2021
The SFC has warned that where the stock tokens are securities, marketing and/or distributing them in Hong Kong or targeting the region’s investors require a license from the SFC unless there is an exemption applicable.
According to SFC,
“It may also be an offence for any person to offer such tokens to the Hong Kong public without the SFC’s authorisation or registration. Any person who contravenes a relevant provision may be prosecuted and, if convicted, subject to criminal sanctions.”
The Securities and Finance Commission has warned investors to be extremely careful while investing in stock tokens offered on any unregulated exchange as legal remedies may not be available later on.
The Italian Companies and Exchange Commision, the Malta Financial Services Authority and the Bank of Lithuania issued warnings last week that Binance is not licensed to operate in their jurisdiction to provide any investment services.
Over the last few weeks, FCA, Japan’s FSA, MAS, BaFin, and Thailand’s SEC have also issued the same warnings.