By
Chimamanda U. Martha
April 26th, 2024
Although MEXC faces no direct allegations of wrongdoing, its past operations without appropriate licenses across various regions signal potential risks.
Hong Kong’s Securities and Futures Commission (SFC) issued a warning against MEXC, a cryptocurrency exchange, for operating in the region without a license on March 15, 2024. The move is another regulatory action against MEXC globally, raising concerns about the platform’s compliance practices.
This is not the first time that Hong Kong regulators have taken an aggressive stand against MEXC. For example, in April 2023, Japan’s Financial Services Agency flagged the exchange for operating unregistered. Similarly, Germany’s Federal Financial Supervisory Authority also raised red flags in October last year.
The SFC’s warning against MEXC is another alert right after their recent warning against Bybit earlier this week. Such measures come in response to Hong Kong’s efforts to create strong regulatory ground for the growing digital asset market. From June 1st, 2023, any crypto exchange operating within Hong Kong’s jurisdiction will require a license from the SFC.
SFC Also Warned MEXC for Alleged Crypto Fraud
The warning against MEXC was more than just a license issue. Earlier, the SFC warned about a fake site posing as MEXC on 9 February 2024. It lured people on social media, offering free investment tips. Victims were sent to scammer-controlled sites to buy crypto. After depositing for “investment,” victims struggled to withdraw funds.
The fake MEXC and its associated websites were swiftly included on the Securities and Futures Commission’s watchlist for potentially fraudulent virtual asset trading platforms. Additionally, law enforcement worked to restrict access to these deceptive sites, showcasing a united front in the battle against cryptocurrency-related scams.
Although MEXC faces no direct allegations of wrongdoing, its past operations without appropriate licenses across various regions signal potential risks. For investors in Hong Kong and globally, diligent research into any crypto exchange’s background becomes imperative before committing funds to such platforms.
SFC Recent Warning against Bybit
The Hong Kong Securities and Futures Commission has also issued a warning against Bybit, a cryptocurrency exchange. According to the warning list released by the regulator, the platform is unlicensed for crypto-related product trading in many jurisdictions.
The SFC’s warning covers 11 products from Bybit, such as futures, leveraged tokens, and lending services are not allowed. The regulator stated that none of the entities under the Bybit group is licensed or registered to perform any regulated activity in Hong Kong.
However, Bybit did not apply for a virtual asset trading operator license by February 29, the deadline for such applications in Hong Kong. The SFC’s warning highlights regulatory non-compliance and a wider effort to crack down on unlicensed platforms operating within the special administrative region.
The SFC has only licensed two crypto exchanges, OSL and HashKey Exchange. OSL exchange secured its license on December 15, 2020, becoming one of the earliest authorized crypto exchanges. HashKey Exchange received its license on November 9, 2022, joining the small group of regulated crypto firms in the region.