In response to the ongoing JPEX cryptocurrency exchange scandal, the Hong Kong Securities and Futures Commission (SFC) has announced plans to enhance its efforts in combating unregulated cryptocurrency trading platforms operating within its jurisdiction.
In a statement released on September 25, the SFC declared its intention to create a public list encompassing licensed, deemed licensed, closing down, and application-pending virtual asset trading platforms (VATPs). This initiative aims to assist the public in identifying potentially unregulated VATPs conducting business in Hong Kong.
Additionally, the SFC will maintain a dedicated list of "suspicious VATPs," prominently featured on the regulatory authority's website for easy access.
These measures come in the wake of the ongoing JPEX crypto exchange scandal, which local media outlets have described as one of the most significant instances of financial fraud to impact the region. JPEX is accused of promoting its services to Hong Kong residents without obtaining a license in the country.
Speaking at a press briefing on September 25, Christopher "Kit" Wilson, Director of Enforcement at the SFC, explained that due to "evasive" behavior from stakeholders and unsatisfactory responses to information requests, JPEX was placed on the alert list in July 2022.
Wilson disclosed that the SFC subsequently launched a complex investigation involving multiple parties across various jurisdictions. The investigation escalated in April 2023 following the receipt of the first official investor complaint.
At the time of this publication, the financial repercussions of the JPEX scandal are estimated to have reached approximately $178 million, with local police receiving over 2,200 complaints from affected exchange users.
Eleven individuals, including crypto influencers, YouTubers, and employees of the allegedly fraudulent crypto exchange, have been taken into custody for questioning.
In a statement, the SFC emphasized that the aftermath of the JPEX scandal "underscores the risks associated with dealing with unregulated VATPs and underscores the necessity for proper regulation to maintain market confidence."
The regulatory body also indicated its intent to collaborate with local law enforcement to establish a dedicated channel for citizens to report suspicious activities and potential legal violations by VATPs. Additionally, they will intensify efforts to investigate the JPEX incident further, with the aim of bringing wrongdoers to justice.
Comments