Growing Trend in Stablecoin Applications
In a recent report by Ming Pao, Leung Chee-hing, the Executive Director of the Intermediaries Division at the Hong Kong Securities and Futures Commission (SFC), highlighted a growing trend among companies claiming intentions to apply for stablecoin licenses. This development has spurred a noticeable uptick in their stock values, as investor enthusiasm surges.
Warnings for Investors
However, Leung has warned investors to exercise caution, emphasizing the importance of maintaining a rational approach amid escalating concerns over potential fraud risks.
Concerning Statistics
Leung pointed to a troubling statistic from the first half of this year, which saw 265 complaints related to virtual asset trading. These complaints predominantly came from overseas investors reporting financial losses. The reported issues ranged from falling prey to scams and hacking incidents resulting in stolen assets to platforms neglecting to pay out earnings and locking funds under allegations of money laundering.
Risks of Unlicensed Trading
The Executive Director stressed that without utilizing licensed platforms for virtual asset trading, investors are engaging in risky behavior akin to “playing Russian roulette.”
With the recent regulatory focus on stablecoins, it is crucial for investors to stay vigilant and informed about the inherent dangers in this volatile market.
