- The SFC, one of Hong Kong’s main financial regulators, has committed to increasing measures to tackle unregulated cryptocurrency platforms.
- The SFC announced that it would also maintain a specific list of “suspicious VATPs,” which will be displayed on a website.
The Securities and Futures Commission (SFC), one of Hong Kong’s main financial regulators, has committed to increase measures to tackle unregulated cryptocurrency trading platforms within its jurisdiction.
In a statement made on September 25, the SFC stated that in order to better assist the general public in identifying possibly unregulated virtual asset trading platforms (VATPs) operating in Hong Kong, it would publish a list of all licensed, deemed licensed, closing down, and application-pending VATPs.
The SFC announced that it would also maintain a specific list of “suspicious VATPs,” which will be displayed in a prominent and publicly accessible area of the regulators’ website.
The recent JPEX cryptocurrency exchange crisis, which local media sites are portraying as one of the greatest instances of financial fraud to ever affect the area, has prompted the urgent implementation of new regulations. JPEX is accused of advertising its services to people in Hong Kong even though it hasn’t sought a license there.
Christopher “Kit” Wilson, director of enforcement at the SFC, explained that JPEX was put on the alert list in July 2022 as a result of “evasive” behavior from stakeholders and inadequate responses to information requests during a press briefing on the new regulations and the JPEX scandal on September 25.
After receiving its first official investor complaint in April 2023, the SFC reportedly initiated a complicated investigation involving numerous parties and several different locations. This inquiry, according to Wilson, became more intense.
“In June 2023, an AMLO (Anti-Money Laundering Ordinance) came into full effect. At that time, enforcement commenced a more formal fraud investigation. As a result of that investigation, we issued a formal warning on September 13 and referred the matter to the police.”
JPEX’s financial impact was projected to be roughly $178 million, and local police had received more than 2,200 complaints from exchange customers who had been negatively impacted.
Eleven persons in total, including YouTube stars, crypto influencers, and workers from the allegedly dishonest cryptocurrency exchange, have been detained and are being questioned.
The SFC stated that the consequences of JPEX show the “risks of dealing with unregulated VATPs” and the requirement for proper “regulation to maintain market confidence.”
The authorities noted that in addition to conducting a more thorough investigation into the JPEX incident to “bring the wrongdoers to justice,” they would also collaborate with local police to create a dedicated channel for residents to report suspicious activities and possible legal violations by VATPs.