Hong Kong’s Securities and Futures Commission (SFC) has issued a public warning against the activities of the MEXC crypto exchange within the region.
In a public statement published on March 15, 2024, the SFC highlighted that MEXC had been actively promoting its services to investors in Hong Kong without possessing the necessary operational license or even submitting an application for a virtual asset trading platform (VATP) license as required by law.
The agency noted that, under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, it is a criminal offence to operate a business offering crypto asset services, such as a crypto exchange, without proper licensing within the jurisdiction.
In a bid to safeguard investors, the securities regulator cautioned against trading crypto assets on unregulated exchanges, emphasizing the inherent risks that could result in substantial losses should the exchange cease operations.
This warning from the securities watchdog comes on the heels of a similar caution issued against Bybit just a day earlier, underscoring its growing concern over unlicensed crypto exchanges.
In tandem with its caution statement, the SFC officially added MEXC to its “Suspicious Digital Asset Trading Platforms Alert List.” Presently, the list comprises over 20 cryptocurrency exchanges, including Bybit. According to the regulator, Hong Kong residents should avoid interacting with the firms on the list because they possess the required licenses to operate in the region, but they are doing so.
Meanwhile, this is not the first time MEXC has faced regulatory scrutiny. In April 2023, it encountered similar issues with Japan’s Financial Services Agency for operating without proper licensing or registration within its jurisdiction.
Also, in October of the same year, the German securities regulator, the Federal Financial Supervisory Authority (BaFin), warned Germans about MEXC’s unauthorized provision of financial services. BaFin stressed that only authorized firms can offer financial services within the country, and MEXC was not in that category.
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