The Hong Kong Securities and Futures Commission (SFC) Collaborates with Police to Tackle Illicit Crypto Activities
The Hong Kong Securities and Futures Commission (SFC) has joined forces with the Hong Kong Police Force to establish a task force aimed at combating illicit activities within the cryptocurrency exchange sector. This collaboration follows a high-level meeting between the two parties on September 28, 2023.
Hong Kong SFC to Intensify Monitoring of Illicit Crypto Operations
In an official statement, the Hong Kong SFC announced the formation of a dedicated task force that will actively crack down on crypto exchanges operating in the region. The Securities and Futures Commission (SFC) has created a working group in collaboration with the Hong Kong Police Force (HKPF) to enhance cooperation in monitoring and investigating illegal activities related to Virtual Asset Trading Platforms (VATPs).
The working group will facilitate information exchange between the police force and regulator, as well as implement a comprehensive risk assessment process for suspicious crypto exchanges.
The task force will comprise members from various Hong Kong authorities, including the HKPF’s Commercial Crime Bureau, Cyber Security and Technology Crime Bureau, Financial Intelligence and Investigations Bureau, as well as the SFC’s Enforcement Division and Intermediaries Division. Its primary objective is to protect investors’ interests in the region.
Hong Kong Flooded with Complaints About Crypto Exchange JPEX
The establishment of this task force comes amidst growing concerns regarding the activities of crypto exchange JPEX. Hong Kong authorities have received over 1,408 fraud complaints related to JPEX’s operations, resulting in total losses of HK$1.3 billion.
CoinMarketCap, a leading crypto data aggregator, has classified JPEX as an “untracked listing,” indicating that it does not adhere to CoinMarketCap’s guidelines. The platform has also shared an extract of JPEX’s profile on its website.
Furthermore, the Hong Kong Police have arrested 11 individuals connected to JPEX, including company employees and online promoters. Notably, social media influencers Joseph Lam Cook, Chan Wing-yee, and Chu Ka-fai are among those arrested.
In a separate development, the Hong Kong Monetary Authority (HKMA) recently issued a warning advising crypto companies against presenting themselves as “banks.” The advisory emphasizes the need for crypto firms to differentiate themselves from traditional financial institutions and transparently disclose the investment risks associated with cryptocurrencies.
Hot Take: Collaborative Efforts to Combat Illicit Crypto Activities in Hong Kong
The collaboration between the Hong Kong Securities and Futures Commission (SFC) and the Hong Kong Police Force is a significant step towards combating illicit activities within the cryptocurrency exchange sector. By establishing a dedicated task force and enhancing cooperation between regulatory authorities and law enforcement, Hong Kong aims to protect investors’ interests and crack down on fraudulent practices.
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