Hong Kong’s Securities and Futures Commission (SFC) has issued a warning to investors, highlighting rising trading risks and potential fraud following the implementation of the Stablecoin Ordinance on August 1.
Local media outlet Zhitong Finance reported that the SFC has observed an “enthusiastic” market response to the new law. However, regulators caution that this increased activity also brings higher fraud risks.
In response, the SFC, together with the Hong Kong Monetary Authority, released a joint statement expressing concerns over market volatility linked to stablecoins and advising the public to exercise caution.
While the agencies did not specify the number of fraud complaints filed after the ordinance came into effect, data from the first half of the year showed 265 complaints related to fraud and other digital asset crimes—figures that have remained steady over the past two years. This trend suggests that 2025 could see fraud complaints surpass the annual total.
On August 18, Ye Zhiheng, Executive Director of the SFC’s Intermediaries Department, urged investors to stay cautious and maintain rational judgment. He noted that shares of companies expressing interest in obtaining a stablecoin issuer license often experience notable price increases.
Hong Kong SFC fuels surge in stablecoin interest
Over the past month, crypto-related stocks have surged ahead of the implementation of Hong Kong’s Stablecoin Ordinance. A clear example is Hong Kong-listed Chinese brokerage Guotai Junan, whose shares climbed 16% from late July into early August before dipping slightly.
Although Guotai Junan has never publicly expressed interest in issuing stablecoins, its status as a crypto-focused firm drew investor attention as confidence in the sector rose ahead of the new regulations. This likely explains both the sharp rally and the subsequent dip following August 1.
Additionally, Hong Kong’s first licensed crypto exchange, OSL, experienced notable gains, rising over 12% in July after announcing that a significant portion of its $300 million fundraising would be allocated toward stablecoin development and global expansion.
Since early August, OSL’s share price on the ASX has peaked at $1.20, though it has also faced market volatility, briefly dropping to $1.12 shortly after reaching its monthly high. The company’s market capitalization has grown to approximately $14.11 million.
