Hong Kong's markets regulator has escalated its scrutiny of cryptocurrency exchanges by adding Bybit, the third largest offshore exchange, to its warning list of suspicious investment products. This move comes as part of the city's ongoing efforts to regulate the crypto space, amidst the launch of phase 2 of its e-HKD CBDC pilot. Bybit, known for its wide array of offerings including futures contracts, options, leveraged tokens, and wealth management products, has seen 11 of these offerings flagged as suspicious. Despite Bybit's local entity, Spark Fintech, applying for a crypto license in Hong Kong, its offshore entity's inclusion on the warning list marks a significant development, given the rarity of such actions.