The Securities and Futures Commission (SFC) of Hong Kong has expressed concern over the lack of regulation for dealing with fraud in the crypto space, local news agency The Standard reports May 30.

SFC enforcement chief Thomas Atkinson has recently pointed out problems associated with the existing regulatory uncertainty over initial coin offerings (ICOs) and cryptocurrency trading.

Atkinson, who resigned from Canada’s largest securities enforcement authority, the Ontario Securities Commission (OSC), back in 2016, emphasized that the structure of certain crypto exchanges is “beyond the scope of the SFC,” the report notes.

The official urged local lawmakers and authorities to develop an approach to monitor crypto-related entities, stressing that the current crypto market is still vulnerable to major risks such as fraudulent activity.

The new statement has followed the SFC’s recent guidance on security token offerings (STOs) issued in March. In the official document, the Hong Kong’s securities regulator stated that STOs are likely to be securities, and thus should fall under the existing securities laws.

The regulator has also previously issued a statement suggesting guidelines for funds dealing with crypto assets, stating that it could begin to formally regulate crypto exchanges in the future.