The Securities and Commodity Futures Commission (SFC), Hong Kong's financial regulator, said on Friday it will close cryptocurrency exchanges that operate in Asia's financial market without a license or violate local securities laws.
Investors are complaining they are unable to withdraw cryptocurrency from their accounts on some exchanges and are suffering significant losses due to “technical problems” on the platforms, the SFC says.
There have been several complaints against ICO issuers where the company or project issuing their own digital coins “tokens” to raise real money from the public is unlicensed or fraudulent.
“We will continue to monitor the market and enforce regulations. But we also encourage market professionals to carry out due diligence to prevent fraudulent or questionable fundraising and to help us enforce the law,” said Ashley Alder, chief executive officer of the SFC.
The SFC's action comes as authorities in most countries oppose trading in digital currencies and warn investors that the soaring cryptocurrency prices last year were speculative.
Bitcoin, the best-known form of cryptocurrency, has risen more than by 1,000 percent in 2017.
However, the threat of regulatory restrictions and bans on crypto businesses has already led to a hasty sell-off, with the price of Bitcoin falling by about 50 percent.
The SFC said it had sent warning letters to seven cryptocurrency exchanges in or linked to Hong Kong that they should not trade crypto without a license.
"Most of these exchanges either confirmed that they do not provide services for the sale of cryptocurrency, or that they will immediately take all necessary measures, including removing certain types of cryptocurrencies from their platforms,” the regulator said.
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