Recently, Hong Kong’s Securities and Futures Commission (SFC) has raised concerns about Bybit, a virtual asset trading platform, for operating without the required licensing. The SFC issued a public warning on March 14, stating that Bybit had offered its products to investors in Hong Kong without proper authorization.
Unlicensed Operations and Concerns
The SFC highlighted that none of the entities within the Bybit group hold the necessary license to carry out regulated activities in Hong Kong. This raises significant red flags as it means that Bybit’s products, including futures contracts, options, leveraged tokens, and more, are being offered illegally to investors in Hong Kong.
Specific Products of Concern
Among Bybit’s offerings, the SFC pointed out 11 specific products as suspicious, including futures contracts, inverse futures contracts, options, leveraged tokens, liquidity mining, staking, lending, and wealth management. The regulator also singled out Bybit Dual Asset and Bybit Shark Fin as questionable services, adding them to the list of suspicious investment products.
The SFC made it clear that it may take further regulatory action against Bybit if deemed necessary. The commission stated that it is prepared to enforce action against any unlicensed activities to protect investors and uphold regulatory standards in the region.
Legal Ramifications
Operating unlicensed crypto-related products and services in Hong Kong is considered a criminal offense. This includes offering futures contracts without authorization and promoting such products illegally. Individuals relying on unlicensed services run the risk of losing their investments if the platform shuts down or engages in fraudulent activities, with little to no legal recourse available.
Despite the regulatory scrutiny, Bybit remains a prominent player in the cryptocurrency market, being the third-largest centralized crypto exchange globally. With a significant trading volume exceeding $7 billion as of March 14, Bybit’s operations continue to attract investors, despite the lack of proper licensing in Hong Kong.
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