Hong Kong’s Securities and Futures Commission has taken regulatory action against 14 cryptocurrency exchanges and issuers of initial coin offerings (ICOs) on the back of complaints from investors.

The SFC did not reveal which exchanges and ICO issuers were under scrutiny.

It said investors have complained that they were unable to withdraw fiat currencies or cryptocurrencies from their accounts opened with cryptocurrency exchanges.

Some complainants claimed that cryptocurrency exchanges had misappropriated their assets or manipulated the market causing them significant losses.

As such, it has issued letters to seven cryptocurrency exchanges in Hong Kong or with connections to Hong Kong warning them not to trade digital currencies which are securities as defined in the Securities and Futures Ordinance (SFO) without a licence.

Most of the exchanges took immediate rectification measures, including removing relevant cryptocurrencies from their platforms.

The SFC said it may take further action against cryptocurrency exchanges which disregard the provisions of the SFO and those which are repeat offenders.

The SFC has also written to seven ICO issuers. Most of them confirmed compliance with the SFC's regulatory regime or immediately ceased to offer tokens to Hong Kong investors.

‘We are also urging market professionals to do proper gatekeeping to prevent frauds or dubious fundraising and to assist us in ensuring compliance with the law,’ said CEO Ashley Alder.

'If investors cannot fully understand the risks of cryptocurrencies and ICOs or they are not prepared for a significant loss, they should not invest,' added Julia Leung, executive director of intermediaries.