Hong Kong to List ‘Suspicious’ Crypto Platforms After JPEX Scandal

hong kong

Following the ongoing JPEX scandal, the Hong Kong Securities and Futures Commission plans to create a list of crypto trading platforms that seem suspicious and make it available to the public.

The Securities and Futures Commission (SFC) in Hong Kong, an important financial regulator, is determined to crack down on unregulated cryptocurrency trading platforms operating within its jurisdiction.

In an announcement made on September 25, the SFC stated that it would create a comprehensive list. This list would include all licensed, deemed licensed, closing down, and pending-application virtual asset trading platforms (VATPs). The purpose is to make it easier for the public to spot potentially unregulated VATPs operating in Hong Kong.

Additionally, the SFC will maintain a separate list specifically for “suspicious VATPs.” This list will be prominently displayed on the regulator’s website, ensuring easy access for anyone looking for this information.

The new measures being introduced by the SFC to combat unregulated VATPs. Source: Hong Kong SFC

Hong Kong’s Response to JPEX Scandal

Hong Kong has introduced new rules in response to the JPEX crypto exchange scandal, which local media has called one of the region’s worst financial fraud cases. JPEX is accused of providing services to Hong Kong residents without the required license.

At a press briefing on September 25, Kit Wilson, the SFC’s Director of Enforcement, discussed the situation. He mentioned that due to evasive behavior and unsatisfactory responses from those involved, JPEX was put on the SFC’s alert list in July 2022.

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Investigation and Formal Warning

The SFC launched a complex investigation, involving various parties across different places. It escalated in April 2023 after an official investor complaint. When the Anti-Money Laundering Ordinance (AMLO) came into full effect in June 2023, they started a more formal fraud investigation. This led to a formal warning issued on September 13 and the case being handed over to the police.

Financial Impact and Arrests

The financial losses linked to the JPEX scandal are estimated at about $178 million. Local police have received over 2,200 complaints from affected users. 11 individuals, including crypto influencers, YouTubers, and employees of the alleged fraudulent exchange, have been detained for questioning.

SFC’s Response to JPEX Fallout

In an official statement, the SFC emphasized that the consequences of the JPEX case underscore the dangers of engaging with unregulated virtual asset trading platforms (VATPs) and highlight the necessity for appropriate regulations to uphold market trust.

Additionally, the regulators announced their collaboration with local law enforcement to create a dedicated channel for citizens to report information related to suspicious activities and possible legal violations by VATPs. They are also committed to conducting a more thorough investigation into the JPEX incident to assist in bringing those responsible for wrongdoing to justice.

Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.

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  • Asad

    Asad is a dynamic and talented cryptocurrency content author who brings a wealth of knowledge and enthusiasm to every article. With a deep understanding of blockchain technology and a passion for digital assets, Asad's writing is both informative and engaging.

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