Hong Kong Regulators Flag Unlicensed Crypto Firm Amid Police Investigation

Regulatory crackdowns are intensifying in Hong Kong as the Securities and Futures Commission (SFC) flags Star Bridge Capital Group and its related entities for operating without a license. The firms, which claimed to hold licenses from Australia's ASIC and South Africa's FSCA, have been added to the SFC's Alert List.

The move comes after a string of client complaints, police investigations, and an abrupt exit from the Asian market by the platform behind Star Bridge, known as SBCFX. In its last days of operation in Asia, SBCFX announced it would cease all operations, giving clients just over a week to close positions and withdraw funds.

On August 19-20, traders on the SBCFX platform reported severe anomalies with London gold (XAUUSD) contracts for difference, leading to forced liquidations that wiped out their positions. The Hong Kong police received approximately 54 complaints from affected traders, with losses ranging from HK$5.92 million to HK$6.63 million.

The investigation has resulted in the arrest of five individuals, aged 26-43. One notable challenge for investigators is the use of USDT, a stablecoin issued by Tether, which made it difficult to track and recover client funds.