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- 1 Hong Kong SFC is stepping up crypto oversight after the JPEX scandal.
- 2 The SFC announced plans to disclose all crypto exchange license applicants.
In response to the JPEX probe, the principal financial regulator of Hong Kong, the Securities and Futures Commission (SFC), announced plans. According to its plan, SFC will issue a public list of suspicious crypto trading platforms. This will disclose all crypto exchange license applicants.
It must be noted that this move comes as the territory intensifies its regulatory measures to ensure transparency and safeguard investors. The SFC believes that improved dissemination of information about potential risks linked to virtual asset trading platforms can enhance investor awareness.
Tough Day For The Hong Kong Crypto Industry!
After the JPEX crypto exchange scandal in Hong Kong, it seems like SFC is boosting its efforts to manage unregulated cryptocurrency trading platforms in its jurisdiction. On September 25, 2023, SFC officially said that it would publish a list of all licensed, deemed licensed, closing down and application-pending virtual asset trading platforms (VATPs).
As the SFC said, with this effort, they can better help members of the public identify potentially unregulated VATPs doing business in Hong Kong. It will also keep a dedicated list of suspicious VATPs that will be featured in an easily accessible and prominent part of SFC’s website.
The SFC also said in a statement that the resulting fallout from JPEX highlights the risks of dealing with unregulated VATPs and the need for proper regulation to maintain market confidence.
In a recent press release, Christopher ‘Kit’ Wilson, the SFC’s Director of Enforcement, talked over the new rules and the JPEX scandal. He stated that due to evasive behavior from stakeholders and unsatisfactory responses to requests for information, JPEX was placed on their alert list in July 2022.
Wilson also shared that later, the SFC launched a complex investigation involving multiple parties across a range of jurisdictions. This escalated in April this year as the organization received its first official investor complaint.
An Infamous Financial Fraud in Hong Kong
According to local media outlets, the JPEX crypto exchange scandal was one of the worst cases of financial fraud to ever hit the region. JPEX stands accused of promoting its services to Hong Kong residents despite not having applied for a license in the country.
Wilson shared that the SFC then launched a complex investigation involving multiple parties across a range of jurisdictions, which escalated in April 2023 after the organization received its first official investor complaint.
As per a recent media report, the financial breach at JPEX is estimated to have reached almost $178 Million. Meanwhile, the local police received over 2,000 complaints from affected users of the exchange. As a result, a total of 11 people, including crypto influencers, YouTubers, and employees of the allegedly fraudulent crypto exchange, have been taken into custody for questioning.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
