Ongoing JPEX Scandal Sparks SFC Crackdown in Hong Kong

• Hong Kong SFC declares plans to launch an inventory of suspicious crypto buying and selling platforms.
• The announcement comes after the controversial JPEX scandal, probably “one of many largest” instances of fraud” within the area.
• These are a part of the efforts of the Hong Kong SFC to make the crypto market safer and clear.

On Monday, September 24, Hong Kong’s securities regulator, the Securities and Futures Fee (SFC) introduced its plans to unveil a complete “blacklist” of suspicious cryptocurrency buying and selling platforms.

This complete checklist, which is to be disclosed as a result of public demand, is comprised of all licensed, deemed licensed, closing down, and application-pending digital asset buying and selling platforms (VATPs). The regulator’s chief government officer Julia Leung Fung-yee, nevertheless, warned in a press convention on Monday that being an applicant doesn’t warrant that the businesses are totally compliant with the SFC’s rules.

The announcement from Hong Kong’s securities regulator comes days after the continued JPEX scandal the place the platform was allegedly stated to have supplied its providers to retain traders in Hong Kong with out a license.

In accordance with a report from the SFC, the platform had suspended buying and selling and imposed a excessive withdrawal payment on these looking for to withdraw their cash. As per studies from Saturday, September 23, as much as 2305 complaints have been registered towards the platform, with losses amounting to not less than HK 1.43 billion (US$182 million).

With extra complaints anticipated to register, native media retailers are highlighting the case as “one of many largest fraud instances” within the area’s historical past. A number of folks have been arrested by the Hong Kong police in connection to the JPEX case, together with crypto influencers Joseph Lam (Lin Zuo) and Chan Wing-yee.

The crackdown is a part of the regulator’s steps to carry security and transparency to the often-vexing cryptocurrency market. Furthermore, the SFC has beforehand mandated all crypto buying and selling platforms underneath its jurisdiction to be licensed.

Seemingly, solely two cryptocurrency buying and selling platforms, OSL Digital Securities Restricted and Hash Blockchain Restricted, are licensed at present. That is along with 4 others (HKVAX, HKBitEx, Hong Kong BGE Restricted, and Victory Fintech Firm Restricted) who’ve reportedly utilized for licenses.