The Securities and Futures Commission (SFC) of Hong Kong has issued a stern warning to the public regarding the activities of virtual asset trading platform “MEXC.” In its announcement today, the SFC highlighted the platform’s aggressive promotion targeting Hong Kong investors.
Regulatory Concerns Against MEXC and SFC Action
As per the SFC announcement, MEXC has not obtained a license from the SFC nor has it sought approval to operate as such in Hong Kong. This lack of regulatory oversight raises significant concerns about the safety and legality of the platform’s operations.
According to the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, operating a virtual asset exchange in Hong Kong without proper licensing constitutes a serious offense. Despite this, MEXC has been actively marketing its services to investors in the region, prompting the SFC to take action.
In response to these developments, the SFC has placed MEXC and its website on the Suspicious Virtual Asset Trading Platforms Alert List, effective March 15, 2024. This action aims to alert investors to the potential risks associated with engaging with unlicensed platforms like MEXC. It is pertinent to mention here that SFC did the same to Bybit yesterday.
SFC has strongly advised investors against trading virtual assets on unregulated platforms like Bybit and MEXC. Factors such as platform shutdowns, collapses, hacks, or misappropriation of assets could result in substantial financial losses for investors.
Prior Incidents and Ongoing Concerns
The SFC has emphasized its commitment to taking enforcement action against unlicensed platforms where necessary. It’s worth noting that MEXC has previously been associated with suspected virtual-asset related fraud, as highlighted in the SFC’s press release dated February 9, 2024. This history of questionable activities further underscores the importance of exercising caution when dealing with the platform.
Furthermore, MEXC’s recent marketing campaign targeting Hong Kong investors, offering rewards for completing KYC procedures and referring friends to trade on the platform, raises additional red flags about the platform’s intentions and practices.
In light of these developments, the SFC has urged investors to remain vigilant and exercise due diligence when engaging with virtual asset trading platforms. By staying informed and cautious, investors can better protect themselves from potential risks and scams in the rapidly evolving virtual asset landscape.
