Hong Kong Watchdog Flags Bybit As Dubious, Spark Fintech Seeks License

In a recent move by Hong Kong’s financial oversight authority, the cryptocurrency exchange Bybit has been marked as a “suspicious” entity. This development comes even though Spark Fintech, Bybit’s local affiliate, applied for a crypto exchange license earlier this year.

The Securities and Futures Commission (SFC) of Hong Kong updated its roster of questionable virtual asset trading platforms on Thursday, adding Bybit to the list. Furthermore, the SFC pinpointed 11 offerings from Bybit as potentially dubious.

These flagged products include a variety of investment options such as Bybit Futures Contracts, Inverse Futures Contracts, Options, Leveraged Tokens, Dual Asset and Dual Asset 2.0 programs, Shark Fin, Liquidity Mining, ETH 2.0 Liquid Staking, Web3 Staking, Lending, and Wealth Management services.

SFC Concerns & Bybit Response

The SFC expressed concern over these products being available to investors in Hong Kong, emphasizing that no Bybit group entity holds a license or registration with the SFC to engage in any “regulated activity” within the region.

In response to these allegations, Bybit’s spokesperson stated, “At this time, we cannot comment on any specific product or regulatory inquiry.” They assured that they tailor the products in question to meet compliance requirements across various regions and ensure that they are inaccessible to the Hong Kong market.

The SFC’s alert refers explicitly to activities conducted through bybit.com, operated by Bybit’s Fintech Limited, a company based in Seychelles. Bybit.com.hk, managed by Spark Fintech Limited, a distinct entity legally established in Hong Kong, distinguishes itself from Bybit.com.

Earlier in January, Spark Fintech took a step towards regulatory compliance by submitting its license application to the SFC, aiming to operate as a “virtual asset trading platform.” This application is under review, as indicated by the regulator’s list of applicants.

The situation underscores the ongoing scrutiny and regulatory challenges cryptocurrency platforms face. As the digital asset space evolves, regulatory bodies like the SFC are increasingly vigilant to protect investors and ensure market integrity.

Furthermore, the author’s views are for reference only and shall not constitute investment advice. Before purchasing, please ensure you fully understand and assess the products and associated risks.