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The SFC disclosed the exchange provided a fake address for its location in Hong Kong on its website to gain investors’ trust.
The Securities and Futures Commission (SFC) of Hong Kong has alerted the public about HKCEXP, an over-the-counter (OTC) digital assets trading platform for suspected crypto fraud. In a statement released on Monday, the financial regulator said it collaborated with Hong Kong police to restrict access to the platform. The move aims to prevent users from falling victim to a scam.
HKCEXP Flagged for Potential Crypto Fraud
The SFC flagged the company for alleged crypto fraud after users complained of experiencing difficulties withdrawing their funds and paying “exorbitant tax” to process transactions.
HKCEXP was established in 2018 and describes itself to users as a regulated crypto exchange. However, the Hong Kong financial watchdog said the firm has no regulatory license to operate in the country.
The SFC disclosed the exchange provided a fake address for its location in Hong Kong on its website to gain investors’ trust. The market watchdog believes the firm must have provided other false and misleading information about itself and its business operations to mislead investors.
The company operates under different entities, including HKCEXP-MAX and HKCEXP OTC Holdings Co.
The SFC has warned the public to stay off the company’s website and watch out for other bad actors that may leverage the company’s popularity to create similar enterprises. Furthermore, the regulator cautioned investors to be careful while making investment decisions, as online investment scams can occur in different forms.
“Online investment scams may involve any type of asset and are perpetrated through multiple channels, and victims can suffer substantial losses. Therefore, investors should stay vigilant and beware of fraud when making investment decisions,” said the SFC.
Not the First
Meanwhile, this is not the first time Hong Kong’s market watchdog has issued warnings against companies for suspected fraud and other illegal operations.
Earlier this month, the regulator warned the public about another crypto exchange, Bitforex, for alleged fraud involving digital assets.
After receiving multiple complaints from investors who were unhappy with their services, the SFC found that the exchange was not registered in Hong Kong. The platform restricted investors’ access to withdraw their funds.
Blockchain on-sleuth ZachXBT discovered the alleged fraud before SFC’s warning. The investigator found that Bitforex moved approximately $56.5 million from its hot wallet to an unknown address on February 23, 2024. Shortly after, users began experiencing difficulties taking out their platform assets.
In February, the SFC cautioned the public about MEXC, a digital asset trading platform. The financial regulator claimed the exchange operates in the jurisdiction without obtaining authorization from the appropriate authorities.
