Hong Kong SFC Classifies Bybit as a “Suspicious” Crypto Trading Platform

Table of Contents

• 11 Bybit Products Identified as Suspicious
• Spark Fintech Limited Not Involved

Hong Kong’s Securities and Futures Commission (SFC) classed cryptocurrency exchange Bybit among its list of “suspicious virtual asset trading platforms” and identified 11 products Bybit offers as suspicious. 

 Hong Kong’s financial regulator added crypto exchange Bybit to its list of “suspicious” trading platforms and warned the public about the risks associated with 11 Bybit products. The SFC included Bybit despite the company’s local entity, Spark Fintech Limited, submitting a crypto exchange license application earlier in the year. 

11 Bybit Products Identified as Suspicious

Hong Kong’s Securities and Futures Commission (SFC) updated its list of “suspicious virtual asset trading platforms” to include the crypto exchange Bybit. On Thursday, the financial regulator added Bybit to its list of suspicious crypto exchanges and placed 11 of the exchange’s products on its. 

The SFC included Bybit Futures Contracts and Inverse Futures Contracts, Bybit Options, Bybit Leveraged Tokens, Dual Asset, Dual Asset 2.0, Bybit Shark Fin, Liquidity Mining, ETH 2.0 Liquid Staking, Bybit Web3 Staking, Bybit Lending, and Bybit Wealth Management as suspicious investment products. 

The regulator further warned the public that Bybit is an unlicenced platform and said investors may risk losing their entire investment. The SFC informed investors that “Seeking recourse against entities that do not have a nexus with Hong Kong is likely to be difficult, and legal remedies may not be available.” 

In a statement, the SFC said:

“The SFC is concerned that these products have also been offered to Hong Kong investors and wishes to make it clear that no entity in the Bybit group is licensed by or registered with the SFC to conduct any ‘regulated activity’ in Hong Kong.”

The regulator added,

“In Hong Kong, crypto-related products may constitute “futures contracts” or “securities” under the SFO and if so, dealing in and/or marketing these products – whether in Hong Kong or targeting Hong Kong investors – constitute a “regulated activity” and require a licence from the SFC unless an exemption applies (Note 4). It is a criminal offence to carry out regulated activities without a licence.

It is also an offence for any person to issue advertisements, invitations or documents relating to these products to the Hong Kong public without the SFC’s authorisation. Any person who contravenes a relevant provision may be prosecuted and, if convicted, subject to criminal sanctions.”

Spark Fintech Limited Not Involved

In its statement, the SFC noted the concerned activities were conducted by bybit.com, operated by Bybit Fintech Limited, a Seychelles company. The SFC clarified that the Seychelles company is distinct from the separate website bybit.com.kh, managed by Spark Fintech Limited – a Bybit entity incorporated in Hong Kong. Spark Fintech applied for a cryptocurrency exchange license earlier this year. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.