HK Markets Watchdogs Alarm of Cryptocurrency Platform Risks

HK Markets Watchdogs Alarm of Cryptocurrency Platform Risks

United States – The funding markets watchdog in Hong Kong issues a warning on the risks of online programs for cryptocurrency and other deposits.

The SFC or the Securities and Futures Commission stated that investors are wary of the probable high risks linked to digital asset arrangements. The statement comes at a turbulent time for the digital asset market.

SFC also stated that some “virtual asset arrangements” are considered savings or deposit products. These are not controlled but these are not the same as the deposits. There is no protection provided to investors. If investors cannot understand how it works and take on the probable significant or total costs. They shouldn’t have any investment.

The warning came after the arrest of SBF or Sam Bankman-Fried, the founder of FTX. The authorities arrested SBF in The Bahamas on December 13. According to the United States or the US, authorities told them that it’s one of the largest funding frauds in the history of the United States.

The chairman of the SEC or Security and Exchange Commission, Gary Gensler, stated that the previous chief executive of FTX established a house of cards, which was a base of deception. Later on, the judge denied SBF bail out.

JoyAnn Ferguson-Pratt, a Bahamas Chief Magistrate, rejected the request for SBF’s release on bail. The judge cited that it was a risk of flight, ordering the court that he should be in a correctional facility until February 8, 2023.

On the other hand, the rival of FTX, Binance, witnessed withdrawals of over $1 billion in the previous 24 hours after stating that it might pause USDC stablecoins’ withdrawals temporarily.

As per Nansen, a Blockchain data firm, users of the world’s largest cryptocurrency exchange have withdrawn $1.9 billion. On another note, Changpeng Zhao, the chief executive of Binance, established the figure at an estimate of $1.14 billion.

Changpeng Zhao, the CEO of Binance, tweeted that they have net withdrawals on some days, and they have deposited as well, which is a business as usual for them.

Cryptocurrencies are not typical currencies in the typical sense. However, these are stored online and these can also function as investment tools or securities with high volatility. The anonymity states that these virtual assets are prone to criminal activities, like ransomware attacks and drug dealing issues. Nonetheless, supporters state that there’s a big chance for innovation and governments are independent as well.

The largest cryptocurrency, Bitcoin, lost its value by over 60% this year, while other crypto assets dropped sharply.