With the new stablecoin regulatory framework now in force, Hong Kong’s Securities and Futures Commission (SFC) has alerted investors to the heightened fraud risk in the market.
SFC officials cautioned that the buzz around stablecoin licensing has spurred speculative behavior and attracted unverified operators, creating fertile ground for scams
The new rules, effective since August 1, allow for a six month transition period but introduce rigorous requirements including KYC, and include enforcement actions against false claims of licensing.
In the wake of the regulation’s activation, several stablecoin firms reported double digit valuation drops, interpreted by analysts as a market correction bringing certain expectations back to reality.
Officials reminded investors to stay vigilant, avoid hype driven decisions, and not equate licensing announcements with guaranteed credibility.
The SFC’s message is clear: innovation moves forward, but within a framework that prioritizes integrity and investor protection.
