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Hong Kong Securities and Futures Commission: Fraud on virtual asset trading platforms does not mean there are major flaws in supervision

Hong Kong Securities and Futures Commission (SFC) has included the virtual asset trading platform HOUNAX in the list of "unlicensed companies and suspicious websites" in early November. The CEO of SFC, Ashley Alder, said that the SFC received the first complaint at the end of September and started an investigation in October. Due to the time required for the investigation, it was included in the suspicious list on November 1. The SFC stated that it has received a total of 18 complaints about HOUNAX, involving amounts ranging from HKD 12,000 to HKD 10 million.

Alder said that before receiving the complaint, the SFC did not notice that HOUNAX was active in Hong Kong. She emphasized that the methods of fraudsters in virtual asset trading platforms are consistent with the common methods of "pumping and dumping" in traditional financial market products. Therefore, fraud does not mean that there are significant regulatory defects. The SFC also continues to pay attention to unlicensed trading platforms promoting on social media.

As for whether to shorten the grace period for virtual asset trading platforms to obtain licenses, Alder said that even if the grace period ends tomorrow, fraud cases will continue to occur. After balancing various factors, the SFC believes that relevant financial institutions need sufficient time to apply for licenses.

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