What has happened?

Hong Kong's securities regulator has stepped up its efforts to regulate the cryptocurrency market.

What does this mean?

In a statement, the Securities and Futures Commission (SFC) has revealed that it has written to seven cryptocurrency exchanges, warning them that they should not trade certain cryptocurrencies classed as securities without a licence.

The names of the exchanges were not disclosed, but the SFC said they were either based in or connected to Hong Kong and rank among the top 20 in volume globally.

Most of the exchanges responded to the SFC's warning.

"Most of these cryptocurrency exchanges either confirmed that they did not provide trading services for such cryptocurrencies or took immediate rectification measures, including removing relevant cryptocurrencies from their platforms," the statement reads.

The regulator warned that further action may follow, in particular against exchanges that disregard securities laws and repeat offenders.

The SFC has also written to seven ICO issues, with most confirming compliance with the watchdog's regulatory regime or ceasing to offer tokens to Hong Kong investors.

The action on the part of the SFC forms part of the regulator's effort to warn investors about the risks of dealing with cryptocurrencies exchanges and investing in ICOs and follows a statement of September 2017 cautioning would-be investors against those risks.

Going forward, the SFC warned that it would not hesitate to take action and would not tolerate breaches of securities laws.

"We will continue to police the market and enforce when necessary," said Ashley Alder, the SFC's Chief Executive Officer.

"But 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," he added.

The watchdog also reiterated that investors should be wary of the risks associated with cryptocurrencies, from price volatility, hacking or fraud.

"If investors cannot fully understand the risks of cryptocurrencies and ICOs or they are not prepared for a significant loss, they should not invest," said Julia Leung, the SFC's Executive Director of Intermediaries.

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