Hong Kong’s Securities and Futures Commission (SFC) Introduces Measures to Enhance Cryptocurrency Transparency and Security
Hong Kong’s Securities and Futures Commission (SFC) has announced a new initiative aimed at improving transparency and security in the cryptocurrency industry. The SFC plans to publish a comprehensive list of licensed, deemed-licensed, closing down, and application-pending virtual asset trading platforms (VATPs). This move follows the recent JPEX crypto exchange scandal and aims to help the public identify potential unregulated VATPs operating in Hong Kong.
The SFC also intends to establish a dedicated channel in collaboration with the police to share information on suspicious activities and breaches by VATPs. The regulator will investigate the JPEX incident and bring wrongdoers to justice. Additionally, the SFC will enhance its website by issuing a prominent list of suspicious VATPs to raise awareness among investors about possible risks.
During a press conference, the SFC’s CEO, Julia Leung Fung-yee, stated that the decision to publish the list was made in response to public demand. She clarified that being an applicant for licensing does not guarantee compliance with SFC regulations. Currently, only two cryptocurrency trading platforms have obtained licenses to serve retail customers in Hong Kong.
What was the JPEX ‘incident’?
The JPEX incident is alleged to be Hong Kong’s largest-ever financial fraud, affecting at least 2,305 victims and involving approximately HK$1.43 billion ($182.9 million). The Dubai-based crypto exchange was accused of operating without a license in Hong Kong, where it had a substantial customer base.
The SFC also highlighted that certain online influencers and over-the-counter virtual asset money changers disseminated false information about JPEX’s application for a VATP license. As a result, anxious investors rushed to withdraw their virtual assets but discovered they could only withdraw a maximum of 1,000 USDT, with an administrative fee of 980 USDT.
JPEX had been a platinum sponsor of the Token2049 Singapore event. The exchange suspended withdrawals, claiming unfair treatment by relevant institutions in Hong Kong and negative news. Hong Kong police have arrested 11 individuals connected to the JPEX scandal, including social media influencer Joseph Lam Chok, on charges of fraud and operating an unlicensed virtual assets exchange.
Hot Take: Hong Kong Regulator Takes Action to Safeguard Crypto Investors
Hong Kong’s Securities and Futures Commission (SFC) has responded to the recent JPEX crypto exchange scandal by implementing measures to enhance transparency and security in the cryptocurrency space. By publishing a comprehensive list of licensed and unregulated virtual asset trading platforms (VATPs), the SFC aims to help the public identify potential risks associated with unregulated platforms. Furthermore, the regulator plans to collaborate with law enforcement agencies to investigate suspicious activities and breaches by VATPs.
This proactive approach demonstrates the SFC’s commitment to protecting investors and ensuring that information is disseminated in a clear and timely manner. With the ongoing crackdown on fraudulent activities in the crypto industry, these measures are essential for building trust and maintaining the integrity of Hong Kong’s cryptocurrency market.
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