Hong Kong’s Securities and Futures Commission (SFC) has added Bybit to its list of suspicious virtual asset trading platforms and issued a public warning about its unlicensed operations.

In a March 14 warning, the SFC said the platform is unlicensed and expressed concerns that Bybit has offered its products to Hong Kong investors.

Unlicensed operations

According to the regulator, none of the entities operating under the Bybit group have secured the required license to conduct regulated activities in Hong Kong.

The current warning concerns 11 Bybit products, including futures contracts and inverse futures contracts, options, leveraged tokens, liquidity mining, staking, lending, and wealth management. Some of those categories include multiple products.

The warning also named Bybit Dual Asset, a short-term trading tool, and Bybit Shark Fin, a guaranteed earning service, as suspicious products.

All of the above services have been added to a list of suspicious investment products that is separate from the SFC’s list of suspicious virtual asset trading platforms.

Enforcement is possible

The SFC said it may pursue further regulatory action action the platform if necessary.

According to the release:

“The SFC will not hesitate to take enforcement action against unlicensed activities where appropriate.”

It is a criminal offense to offer unlicensed crypto-related products in Hong Kong, including futures contracts and services. It is similarly a criminal offense to promote those products without authorization.

While the possibility of SFC enforcement may provide some degree of protection, individuals in Hong Kong who rely on unlicensed services can lose their investment if a service ends operations, collapses, or misappropriates its users’ assets. Those victims will likely find it difficult to seek recourse against services that do not have a connection to Hong Kong.

Bybit is the third-largest centralized crypto exchange in the world, with a 24-hour trading volume of more than $7 billion as of March 14.