Although MEXC does not face direct accusations of wrongdoing, its past operations without proper licenses in several regions indicate 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 Hong Kong regulators have taken an aggressive stance against MEXC. For example, in April 2023, Japan’s Financial Services Agency flagged the exchange for unregistered trading. Similarly, Germany’s Federal Financial Supervisory Authority also raised red flags in October last year.
The SFC’s warning against MEXC is another alert coming on the heels of its recent warning against Bybit earlier this week. These measures come in response to Hong Kong’s efforts to create a solid regulatory ground for the growing digital asset market.
“Under the Anti-Money Laundering and Terrorist Financing Ordinance, it is an offense to operate a business providing virtual asset services (i.e. operate a virtual asset exchange) in Hong Kong and/or actively promote such services to investors. from Hong Kong without a license,” the regulator’s statement said.
Starting June 1, 2024, any crypto exchange operating within Hong Kong jurisdiction will require a license from the SFC.
The SFC Also Warned MEXC for Alleged Crypto Fraud
The warning against MEXC was more than just a licensing issue. Previously, the SFC warned about a fake site impersonating MEXC on February 9, 2024. It attracted people on social media, offering free investment advice. Victims were sent to sites controlled by scammers to purchase cryptocurrency.
After depositing for “investment,” the victims had difficulty withdrawing funds. The fake MEXC and its associated websites were quickly placed on the Securities and Futures Commission’s watch list for potentially fraudulent virtual asset trading platforms.
Additionally, authorities worked to restrict access to these deceptive sites, showing a united front in the battle against cryptocurrency scams. Although MEXC does not face direct accusations of wrongdoing, its past operations without proper licenses in several regions indicate potential risks.
For investors in Hong Kong and around the world, diligent research into the background of any crypto exchange becomes imperative before committing funds to such platforms.
Recent SFC Warning Against Bybit
The Hong Kong Securities and Futures Commission also issued a warning against Bybit, a cryptocurrency exchange. According to the warning list published by the regulator, the platform is not licensed to trade cryptocurrency-related products in many jurisdictions.
The SFC warning covers 11 Bybit products such as futures, leveraged tokens and lending services that are not permitted. The regulator stated that none of the Bybit group entities are licensed or registered to carry out any regulated activities in Hong Kong. However, Bybit did not apply for a virtual asset trading operator license before February 29, the deadline for such applications in Hong Kong.
The SFC’s warning highlights regulatory non-compliance and a broader effort to crack down on unlicensed platforms operating within the special administrative region. The SFC has only authorized two crypto exchanges, OSL and HashKey Exchange. The OSL exchange obtained its license on December 15, 2020, becoming one of the first licensed crypto exchanges.
HashKey Exchange received its license on November 9, 2022, joining the small group of regulated crypto companies in the region.
By Audy Castaneda
