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Hong Kong’s SFC Targets Fraudulent Crypto Exchange Websites for Blacklisting

ByDayne Lee

Mar 6, 2024
Hong Kong's SFC Targets Fraudulent Crypto Exchange Websites for Blacklisting

Hong Kong’s SFC Targets Fraudulent Crypto Exchange Websites for Blacklisting

The Securities and Futures Commission (SFC) of Hong Kong has taken decisive action against fraudulent activities targeting the local cryptocurrency exchange sector. On March 4, the SFC issued a stern warning against several counterfeit websites masquerading as prominent Hong Kong-based crypto trading platforms, in a bid to safeguard investors and maintain the integrity of the digital asset market.

Crackdown on Impersonation

This recent operation spotlighted the impersonation of two reputable licensed exchanges in Hong Kong: OSL Digital Securities and Hash Blockchain Limited, also known under the brand name HashKey. The SFC’s vigilance led to the identification and subsequent blocking of six fraudulent domains: hskexpro.com, hskex.com, hskexs.com, hskexit.com, oslexu.com, and oslint.com. These actions were propelled by complaints regarding issues such as withdrawal difficulties and exorbitant transaction fees.

In collaboration with the Hong Kong Police Force, access to these deceptive websites has been restricted, showcasing a unified approach to combating cyber fraud.

Public Advisory and Awareness

The SFC has not only taken enforcement actions but also emphasized the importance of due diligence among investors. It encourages the verification of trading platforms through its public register of licensed individuals and institutions, as well as consulting the list of licensed virtual asset trading platforms for accurate information on legitimate entities and their official websites.

To combat the sophistication of these scams, the SFC advises against any financial transactions or money transfers without first confirming the identity of the counterparty. This cautionary stance aims to enhance investor protection and reduce the incidence of fraud within the cryptocurrency market.

Navigating the Online Maze

The challenge of distinguishing authentic websites from fraudulent ones is not trivial, as noted by Bartosz Barwikowski, a layer-1 security expert at Hacken. Especially for first-time visitors, the task can be daunting. Despite the availability of resources like the SFC’s website for verifying URLs, the reality is that few individuals undertake this verification step.

Barwikowski offers practical advice for avoiding such scams, suggesting a preference for mobile applications over websites, given their lower susceptibility to counterfeiting. He also advises consulting reputable third-party websites for additional verification.

Recommendations for Investors:

  • Prefer Mobile Apps: Due to their complexity, mobile apps are harder to impersonate. Always look for apps with numerous positive reviews before trusting them.
  • Consult Trusted Third Parties: For verifying the legitimacy of exchange websites, government websites or specialized platforms like cer.live can provide reliable information.

Regulatory Environment and Compliance

This development occurs in the wake of the SFC’s latest regulatory cycle for crypto exchanges, which concluded on February 29 with the acceptance of the final applications for licensing. Exchanges that missed this deadline are now faced with the requirement to cease operations in the region within a three-month timeframe, underscoring the SFC’s commitment to a regulated and secure digital asset marketplace.

The SFC’s proactive measures against fraudulent crypto exchange websites underscore the ongoing challenges and complexities within the digital asset ecosystem. Through enforcement actions, public advisories, and collaboration with law enforcement, the SFC aims to foster a safer investment environment. For investors navigating this landscape, adopting vigilant practices and leveraging verified information sources are crucial steps in safeguarding their investments against the evolving tactics of online fraudsters.


Featured image credit: danielvfung via iStock

Dayne Lee

With a foundation in financial day trading, I transitioned to my current role as an editor, where I prioritize accuracy and reader engagement in our content. I excel in collaborating with writers to ensure top-quality news coverage. This shift from finance to journalism has been both challenging and rewarding, driving my commitment to editorial excellence.