The Securities and Futures Commission (SFC) of Hong Kong has issued a public warning regarding Bybit, an offshore virtual asset trading platform (VATP). The reason as mentioned in the SFC announcement is offering trading services in crypto-related products without proper licensing. Bybit, the third-largest offshore exchange, has been included in the SFC’s warning list due to concerns over its operations.
Bybit Regulatory Challenges and Investor Risks
Bybit offers a range of crypto-related products, including futures contracts, options, leveraged tokens, and others, in various jurisdictions. Despite Bybit’s entity in Hong Kong applying for a license, its offshore entity has been flagged by the SFC, a move described as rare by the experts.
The SFC emphasized that no entity within the Bybit group is licensed or registered with them to conduct regulated activities in Hong Kong. In the eyes of Hong Kong law, dealing in and marketing crypto-related products may require a license, and failure to obtain one could lead to criminal prosecution, says the SFC.
SFC has cautioned investors against investing with unlicensed entities like Bybit. There’s a risk of losing investments if such entities cease operations, collapse, or engage in misappropriation of assets. Seeking legal recourse against offshore entities may also pose challenges.
Regulatory Actions and Compliance Imperatives
The SFC has placed Bybit on its Suspicious Virtual Asset Trading Platforms Alert List and listed its crypto-related products on the Suspicious Investment Products Alert List. The regulator vows to take enforcement action against unlicensed activities when necessary.
Bybit operates under this domain and is registered in Seychelles under the name Bybit Fintech Limited. It’s important to note that a separate entity, Spark Fintech Limited, operates this website in Hong Kong, which is not associated with the aforementioned crypto-related products.
With the market experiencing rapid evolution, ensuring compliance is paramount to safeguarding the interests of investors. The SFC’s warning underscores the importance of regulatory compliance in the rapidly evolving crypto market. It aims to protect investors from potential risks associated with unlicensed trading platforms.
Bybit is a leading centralized cryptocurrency exchange known for offering a wide range of crypto-related products Headquartered in Singapore, Bybit has gained prominence for its user-friendly interface. Despite its global presence, Bybit has faced regulatory scrutiny in certain jurisdictions, particularly in Hong Kong now, where its operations have been flagged by the SFC.
