The Hong Kong Securities and Futures Commission (SFC) has taken action against two suspected crypto scam websites, HongKongDAO and BitCuped. SFC Director of Enforcement Damon Cheng Tak-ka confirmed their placement on an alert list, revealing that HongKongDAO falsely claimed to have applied for operating licenses with the SFC and the government. Investors lost millions earlier this year through fraudulent activity at the JPEX exchange, prompting increased crypto enforcements in Hong Kong.
HongKongDAO promoted its HKD token with a falsely inflated market value on social media, redirecting users to another site for payment. BitCuped falsely listed the chairman and CEO of Hong Kong Exchange and Clearing as its own. The SFC did not disclose specific figures on victims or funds lost, citing an ongoing investigation. In a separate case, residents lost around $20 million through investment in an unlicensed exchange, Hounax.
Recent crypto laws in Hong Kong, enacted in June, impose strict regulations for obtaining operating licenses, focusing on permissible assets and customer fund security. The investigation into JPEX, which saw victims lose close to $200 million, exposed challenges in enforcing crypto regulations. The SFC faced criticism for not naming JPEX in initial warnings, citing limitations in crypto laws. The case highlighted potential shortcomings in Hong Kong’s rules around crypto marketing, with comparisons drawn to the UK Financial Conduct Authority’s promotion rules.
The European Markets in Crypto-Assets bill addresses exchange requirements and token listing rules but lacks audit rules for evaluating global financial health. It does not cover decentralized finance or provide comprehensive guidance on non-fungible tokens (NFTs), despite regional interest.
By FCCT Editorial Team
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