A cryptocurrency trading platform on Hong Kong and Canadian regulators’ alert lists has opened an office in the city, prompting experts to urge closer scrutiny of how such firms promote themselves without undermining an open business environment.

Experts told the South China Morning Post that inclusion on a regulator’s alert list did not necessarily mean a company had broken the law. But they urged authorities to step up oversight of how such firms marketed regulated financial products.

Polar Tensor, a cryptocurrency investment platform that said it held company registrations in seven jurisdictions, including Hong Kong, Panama and the US states of Montana and Wyoming, opened an office at One Hysan Avenue in Causeway Bay in August. A source told the SCMP that the platform was being monitored by authorities.

The firm has been on the alert list of the Hong Kong Securities and Futures Commission (SFC) since early August. It also appears on investment caution lists issued by regulators in the Canadian provinces of British Columbia, Quebec and Alberta.

The SFC has classified Polar Tensor as a suspicious virtual asset trading platform, saying the firm and its associated websites were not licensed to conduct regulated activities in the city.

An SFC spokesman declined to comment beyond the information published on the regulator’s website.

The regulator said on its website that its alert list included entities that were unlicensed in Hong Kong and believed to be targeting local investors or claiming an association with the city.

Hong Kong has a licensing regime for stablecoins, a type of cryptocurrency pegged to assets such as the United States dollar. Investing through a cryptocurrency platform that is not licensed in the city is not itself illegal.

However, it is illegal to offer unlicensed stablecoins to retail investors in Hong Kong or actively market them to the public.

The SCMP visited Polar Tensor’s office twice in August, including for its opening event, and spoke to people who said they worked with the organisation.

Posts on Polar Tensor’s Telegram channel showed that the platform organised three days of events in Hong Kong in August. These included a seminar and gala dinner at a five-star hotel, followed by an office opening party, another dinner and a junk party.

At the office opening, a staff member said the premises were for “appointments” but declined to explain what these involved. He described those attending as “members” of the platform rather than clients.

The office was sparsely furnished, with rows of tables set up for the opening party. It was closed when the SCMP visited again later in August.

Polar Tensor describes itself on its website as an “advanced AI-powered trading platform”.

Documents seen by the SCMP showed that a German citizen established a company called Polar Tensor LAB in Hong Kong last year, with a registered address in Sheung Wan.

During the SCMP’s visit to Polar Tensor’s Causeway Bay office in October, the doors were locked with no one answering.

A security guard at One Hysan Avenue said that she had not seen anyone at the office for the past two months.

Polar Tensor’s registered entity in Hong Kong remains active as of October, the SCMP has learned.

Lawmaker Johnny Ng Kit-chong said inclusion on a regulator’s alert list did not mean a platform had broken the law.

But he urged authorities to do more to develop regulations governing how firms selling regulated financial products, such as cryptocurrencies, could promote themselves.

“Setting up an office in Hong Kong itself does not offend the law, but opening an office in Hong Kong to sell these products, they would need to with the Securities and Futures Commission,” he said.

Ng, who is also a technology entrepreneur, urged law enforcement agencies to go beyond issuing alerts about suspicious platforms and firms. He also called on authorities to consider whether social media platforms should bear some responsibility for the content promoted on their services.

Blockchain expert Louis Li Sze-chung said inclusion on an alert list was not in itself grounds for arrest, but suspicions about a platform’s operations or business should prompt proactive investigations.

Li, who is also an investor, said common legal violations involving firms offering unlicensed financial products included actively promoting them to the public or soliciting money from users.

But he said public promotion could be difficult to define, as organisations holding invitation-only events could argue they were not promoting themselves to the wider public.

Acknowledging the difficulty of balancing an open business environment with crime prevention, Li said authorities could strengthen due diligence to prevent suspicious businesses from gaining access to the public or appearing to have official endorsement.

“For example, I think rentals of major convention venues or s in MTR stations need to be checked,” he said.

Responding to a SCMP inquiry, a police spokesman said the force had received no reports concerning Polar Tensor. “If we discover criminal elements, we will follow up solemnly and in accordance with the law,” he said.