The Hong Kong Securities and Futures Commission (SFC) has recently raised concerns over Bybit, marking it as a platform of suspicion. This move comes amid a broader regulatory push within Hong Kong to oversee and regulate the crypto market.
The SFC’s cautionary note addresses 11 investment products by Bybit, indicating potential risks these might pose to investors.
Despite Bybit’s efforts to align with local regulations, including its Hong Kong entity, Spark Fintech Limited, applying for a crypto exchange license, the regulator’s spotlight on Bybit underscores the challenging landscape of crypto regulation.
Bybit Regulatory Hurdles And Compliance Efforts This alert by the SFC highlights a critical moment for Bybit, a crypto exchange with a global footprint, as it navigates the complexities of compliance within different jurisdictions.
The identified “suspicious” products span various offerings, from futures and options to wealth management services, emphasizing the regulator’s broad scrutiny.
The SFC’s statement clarifies that no entity within the Bybit group holds a license or registration to conduct regulated activities in Hong Kong.
With the deadline for crypto trading platforms to submit license applications looming, the SFC’s action serves as a reminder of the importance of compliance.
Bybit’s distinction between its international operations and the local entity, Spark Fintech Limited, reflects the complex nature of crypto regulations and platforms’ efforts to adapt to diverse regulatory demands.
The Broader Context Of Crypto Regulation In Hong Kong Notably, the Bybit regulatory hurdle comes at a time when Hong Kong’s SFC shared a recent mandate that requires all crypto trading platforms within its jurisdiction to apply for a license by February 29 or risk being shut down by May 31.
Meanwhile, as Hong Kong aims to position itself as a regulated stronghold for the crypto industry, it has attracted license applications from 24 entities eager to operate within the city.
Among these applicants are prominent industry names like OKX, Crypto.com, and even Bybit, all vying for a chance to comply with the city’s stringent regulations to safeguard investors.
However, the regulatory framework’s focus on investor protection comes with compliance costs that challenge some entities. Given these regulatory shifts, HTX, formerly Huobi Global, has retracted its application for a crypto exchange license in Hong Kong.
This retreat marks a significant change in direction for HTX, which had previously expressed a strong desire to set up a regulated exchange in Hong Kong, backed by the support of TRON founder Justin Sun.
The global digital currency market cap value on the 1-day chart. Source: Crypto TOTAL Market Cap on TradingView.com Featured image from Unsplash, Chart from TradingView
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Samuel Edyme Edyme is a writer, a content writer that specialises in writing about the crypto realm. Asides Bitcoinist and NewsBTC, Edyme’s writing has been featured in top sites such as Blockchain.News, CoinMonk, Blockchain Reporter, Bitcoin Insider among others.