Hong Kong regulators warn of rising stablecoin scam risks as new rules spark market hype and attract unlicensed, deceptive platforms.
Hong Kong’s Securities and Futures Commission (SFC) has issued a warning about rising fraud risks tied to stablecoins. The alert comes after new regulations took effect. Ye Zhiheng, executive director of the SFC’s intermediaries division, spoke to Zhitongcaijing on August 18, 2025. According to him, the new regulations on stablecoins have created a stir in the market with the potential to create more scam risks. Investors have to remain wary and not make rash decisions on the basis of hype.
New Rules Prompt Warnings Over Stablecoin Scam
The Stablecoin Ordinance of Hong Kong came into force on August 1. This regulation enables companies to make applications to be licensed as stablecoin issuers. Nevertheless, it has contributed to risk-taking market behavior. As an example, the stock price of some companies rocketed when they announced that they would seek licenses.
Ye cautioned that such price surges are not usually well grounded. He encouraged investors to be rational and not to follow the momentum in the markets. A joint statement was also issued by the SFC and the Hong Kong Monetary Authority (HKMA). They were concerned with unstable market dynamics that were attributed to stablecoin speculation.
In addition, Ye emphasized the threats of unregulated platforms. He likened trading on unlicensed virtual asset platforms to Russian Roulette. He observed that although a platform appears safe, it may collapse at any time. This renders the investment in these platforms very risky.
Virtual asset trading complaints have remained constant with 265 cases reported as at the first half of 2025. This figure is in line with the last two years. The majority of complaints are not against Hong Kong residents but are against overseas investors. The usual problems are fraud, hacking of the platform resulting in the theft of assets, and platforms that refuse to give profit. Frozen funds on allegations of money laundering are also witnessed in some cases.
SFC and HKMA Vow Tough Action Against Market Manipulation
Ye also pointed out a key problem with complaints. There is a great number of investors who rely on platforms where disputes cannot be resolved clearly. Consequently, others seek the assistance of the SFC as the final option. He emphasized that licensed platforms have greater protection. The new Stablecoin Ordinance will enhance safety by making the advertisement of unlicensed stablecoins to retail investors a criminal offense.
Related Reading: Hong Kong Stablecoin AML Rules Shake Crypto Sector | Live Bitcoin News
In addition, the SFC and the HKMA are monitoring activities in the market. They intend to act very tough on any form of manipulative or deceptive practices. This crackdown will be to safeguard the investors and uphold market integrity. The caution given by Ye shows the effort made by Hong Kong to balance innovation and regulation. The city is interested in promoting the developing crypto market and protecting investors against fraud.
To sum up, new stablecoin regulations in Hong Kong have been associated with new opportunities and threats. As much as the regulations will present a safer market, fraudsters are taking advantage of the hype. Investors should remain cautious and not deal with unlicensed platforms. The fact that the SFC is very concerned with enforcement demonstrates its dedication to serving the people.
The post Hong Kong Regulator Warns of Stablecoin Scam Risks appeared first on Live Bitcoin News.
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