Hong Kong SFC Issues Public Warning Against Unlicensed Trading Platform BiyaPay

Executive Summary

The Hong Kong Securities and Futures Commission (SFC) has issued a public warning against BiyaPay, an unlicensed trading platform that falsely claims to offer stock trading services and operate in Hong Kong without proper authorization.

The Event in Detail

The Securities and Futures Commission (SFC) of Hong Kong has officially added BiyaPay to its Alert List. The platform came to the attention of the SFC through its social media monitoring, indicating that BiyaPay is operating and promoting its services to Hong Kong investors without the necessary licenses. The SFC confirmed that BiyaPay possesses no license and has not submitted an application for one, rendering its operations targeting Hong Kong investors illegal. While BiyaPay advertises real-time cryptocurrency/fiat exchange, low-fee cross-border transfers, and US/HK stock investment, claiming registration as a Financial Service Provider (FSP number: FSP1007221) in New Zealand and with the US Financial Crimes Enforcement Network (FinCEN) as a Money Services Business (MSB), registration number: 31000274115551, these registrations do not confer authorization to operate regulated activities in Hong Kong without local licensing. BiyaPay also states an intent to expedite a Broker-Dealer license application in compliance with US SEC requirements.

Market Implications

This regulatory action by the SFC underscores its commitment to investor protection and strict enforcement against unlicensed financial activities within Hong Kong. The warning against BiyaPay may deter other unregulated platforms from targeting Hong Kong investors and encourages users to verify licenses, potentially redirecting activity towards platforms that comply with local regulatory frameworks. For the broader Web3 ecosystem in Hong Kong, such actions reinforce the stringent regulatory environment and highlight the risks of non-compliance for entities operating within or targeting the jurisdiction.

Expert Commentary

The SFC's proactive approach aligns with its "A-S-P-I-Re" Roadmap for a Resilient Virtual Asset Ecosystem, published on February 19, 2025. This roadmap outlines a five-pillar framework focusing on Access, Safeguards, Products, Infrastructure, and Relationships, aiming to address emerging priorities like managing liquidity fragmentation and ensuring investor protection. The SFC intends to establish licensing regimes for virtual asset over-the-counter (OTC) trading services and custodian services, with consultations on these regimes expected in 2025. This framework also signals an intention to adjust prescriptive requirements, such as rigid custody rules and mandatory hot and cold storage ratios, towards more technology-neutral and outcome-based standards to enhance market flexibility while maintaining robust investor protection.

Broader Context

The warning against BiyaPay is part of a broader regulatory trend by the SFC to safeguard investors from unlicensed and potentially fraudulent financial service providers. The SFC consistently updates its Alert List with entities that are unlicensed but are believed to be targeting Hong Kong investors or claiming association with Hong Kong. This follows previous warnings about other entities suspected of engaging in fraudulent activities related to virtual assets, some of which falsely claimed SFC regulation. Investors are advised to exercise caution with "too-good-to-be-true" investment opportunities and to verify the regulatory status of any platform via the SFC's official lists of licensed virtual asset trading platforms and applicants before engaging in financial transactions.