Hong Kong Authorities Establish High-Level Working Group to Crack Down on Illegal Cryptocurrency Activities
Hong Kong’s police and securities watchdog, the Securities and Futures Commission (SFC), have formed a high-level working group to combat illegal cryptocurrency activities. This move comes after a suspected fraud of $157 million at the cryptocurrency exchange JPEX. The working group aims to facilitate the exchange of information regarding suspicious activities and breaches within crypto trading platforms. It also seeks to implement a mechanism for assessing the risks associated with these platforms.
Eve Chung, assistant commissioner of police for crime, stated that the collaboration between the Police and the SFC is crucial in responding to challenges arising from Virtual Asset Trading Platforms. The establishment of this working group follows a meeting between the two parties, which included representatives from various bureaus and divisions related to financial crime.
Two More Individuals Detained in Connection with JPEX Scandal
In connection with the JPEX scandal, two more individuals, including a television actor, have been detained. This brings the total number of arrests to 20. Over 2,500 victims have reported losses amounting to HK$1.5 billion ($157 million). The JPEX scandal involves frozen assets and unauthorized conversion without prior notice or permission.
JPEX Announces Transition to Decentralized Autonomous Organization (DAO)
JPEX has announced its plan to transition its platform into a Decentralized Autonomous Organization (DAO) following a referendum where 68% of voters supported this move. The program allows users to exchange their frozen assets for dividends as DAO Stakeholders at a one-to-one exchange rate. After one year, JPEX offers an option to repurchase assets at 30% of the conversion price and at full price after two years.
However, an anonymous JPEX user expressed dissatisfaction with the program, stating that their assets were converted without permission or notice and that withdrawals were not possible. This user referred to their assets as “waste paper” due to the uncertainty surrounding their value and the inability to access them.
Hot Take: Hong Kong Authorities Take Swift Action to Combat Crypto Fraud
Hong Kong’s police and securities watchdog have demonstrated their commitment to protecting the public by establishing a high-level working group to crack down on illegal cryptocurrency activities. This move comes in response to the recent $157 million fraud at JPEX. By facilitating information exchange and assessing risks associated with suspicious crypto platforms, authorities aim to prevent similar incidents in the future. The detention of additional individuals connected to the JPEX scandal shows that law enforcement is actively pursuing those responsible for fraudulent activities. Furthermore, JPEX’s transition to a DAO reflects efforts within the crypto industry to address security concerns and improve transparency.
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