Hong Kong’s Securities and Exchange Commission (SFC) is today warning the public about an unlicensed virtual asset trading platform (VATP) known as Bybit, which offers trading services in crypto-related products in various jurisdictions.
Relevant crypto-related products offered by Bybit include:
- Bybit futures and inverse futures.
- Bybit options.
- Leveraging Bybit Tokens.
- Dual asset?
- Dual Asset 2.0;
- Bybit Shark Fin?
- Liquidity mining?
- ETH 2.0 Liquid Staking?
- Bybit Web3 Staking?
- Lending Bybit? and
- Bybit Wealth Management.
The SFC is concerned that these products have also been offered to Hong Kong investors and wishes to make clear that no entity in the Bybit group is licensed or registered with the SFC to carry on any “regulated activity” in Hong Kong.
In Hong Kong, crypto-related products may be “futures” or “securities” under the SFO and, if so, dealing and/or trading in those products – whether in Hong Kong or targeting investors from Hong Kong – constitutes a “regulated activity”. and require permission from the SFC unless an exemption applies. Carrying out regulated activities without a license is a criminal offence.
It is also an offense for any person to issue advertisements, solicitations or documents relating to these products to the Hong Kong public without the permission of the SFC. Any person who contravenes this provision may be prosecuted and, if convicted, subject to criminal penalties.
The SFC has added Bybit to the Suspicious Virtual Asset Trading Platforms and Crypto-related Products Alert List on the Suspicious Investment Products Alert List on 14 March 2024.
The regulator warns investors against investing in unlicensed entities. Investors may risk losing their entire investment in an unlicensed entity if it ceases to operate, collapses or otherwise suffers from any misappropriation of assets. Seeking redress against non-Hong Kong entities is likely to be difficult and remedies may not be available.
Last but not least, the SFC will not hesitate to take enforcement action against unlicensed activities where appropriate.