Securities and Futures Commission (SFC) of Hong Kong has warned about an alleged scam utilizing cryptocurrency exchange MEXC.
The SFC claims that on February 9th, police notified the public about a purported scam involving a company operating under the name MEXC and posing as a virtual asset trading platform (VATP).
MEXC and its websites are now on the SFC’s watch list for dubious virtual asset trading platforms. The police intervened to block MEXC websites. As part of a collaborative working group that tracks and looks into illicit VAT activities, the SFC and the police are currently exchanging intelligence on the case.
The regulator believes MEXC tricked victims into joining chat rooms on social media or instant messaging platforms by pretending to offer free financial advice. According to the SFC statement:
“On these chat groups, victims interested in buying cryptocurrencies were referred to websites operated by MEXC. Victims were then asked to deposit funds into designated bank accounts for investment purposes, but after that they reported difficulties with fund withdrawal”
Hong Kong’s SFC previously forewarned unregistered bitcoin exchanges to apply for licenses by February 29 or close by May 31. Last year, Hong Kong launched a framework for cryptocurrency licensing for platforms that trade virtual assets, opening the door for authorized exchanges to provide retail trading services.
As of right now, the city-state has licenses for HashKey and OSL. Nonetheless, the SFC thoroughly reviewed 14 cryptocurrency companies’ applications.