Hong Kong regulators flagged Bybit as suspicious during license bidding.

Hong Kong’s Financial Supervisory Service has classified cryptocurrency exchange Bybit as ‘suspicious’. This also happens when Bybit’s local branch, Spark Fintech, applies for a trading license. On Thursday, the Securities and Futures Commission (SFC) expanded its list of suspicious cryptocurrency platforms to include Bybit. Additionally, 11 of Bybit’s products were tagged as suspicious.

These products range from futures contracts to asset management services. The SFC’s move signals concerns about the reach of these proposals to Hong Kong investors. This highlights that Bybit is not officially recognized as operating a regulated activity in the region.

This is crazy – #Hong Kong included @BYBIT_OFFICIAL ‘Suspicious’ on the list #Cryptocurrency Exchange 😐 pic.twitter.com/PltuCU6SGu

— Paweł Łaskarzewski (@PawelSynapse) March 14, 2024

Bybit’s response during ongoing review

Meanwhile, Bybit refrained from commenting on specific products or regulatory issues. The company claims its products are tailored to meet compliance standards across the region. This ensures that the products mentioned are not sold in the Hong Kong market.

The controversy stemmed from the operations of Bybit.com, which is operated by a Seychelles-based company. It is separate from bybit.com.hk, which is managed by Spark Fintech Limited in Hong Kong. In early January, Spark FinTech approached the SFC and sought permission to operate as a ‘virtual asset trading platform’. This application is under review and regulatory outcome is pending.

This situation shines a spotlight on the complex regulatory environment facing cryptocurrency exchanges. As Bybit navigates these waters, its quest for legitimacy in Hong Kong continues, marked by regulatory scrutiny and cautious optimism.

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