The Securities and Futures Commission (SFC) of Hong Kong has announced a new initiative to combat crypto fraud. It is aimed at informing the public about cryptocurrency, collective investment schemes (CIS), and digital tokens. The SFC explained that all CIS offerings in Hong Kong are to be permitted by the Commission.
The SFC introduced a list of warnings about the suspected unauthorized use of CIS. This list may include various agreements related to real estate, digital tokens and initial coin offerings (ICOs).
“Unauthorised investment arrangements are highly risky and investors may lose all their investments,” said Ms Christina Choi, the SFC’s Executive Director of Investment Products. “Investors are urged to check the new alert list and find out whether the arrangement is authorised by the SFC before investing.”
The Commission plays a key role in informing investors about potential fraud. The SFC draws the attention of market participants to illegal operations and unregulated companies, recommending them to steer clear of suspicious brokers.
ICOs have long since preyed on the gullible. Even though legitimate cryptocurrency projects do exist, this field is chock full of scammers who turn to ICOs in order to defraud users out of their money. A report published by CipherTrace in May 2021 shows that significant cryptocurrency thefts, hacks and scams have reached $432 million (~£316 million) this year. Investing in high-risk ICO projects, people hope for huge rewards yet often get huge losses instead.
Crypto fraud is rampant in Hong Kong. In August, Hong Kong police arrested 19 suspects in a $1.4 million (~£1 million) crypto scam, to which around 170 people fell prey. In addition, in July, Hong Kong police arrested four people for laundering $150 million (~£110 million) through bank accounts in Singapore.
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The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
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