Hong Kong Government Unfazed by JPEX Scandal; Tightens Crypto Regulations and Reaffirms Web3 Vision
Summary:
Despite the recent $165 million scandal involving Dubai-based crypto exchange JPEX, the Hong Kong government remains steadfast in its commitment to develop the Web3 market. Financial Services and the Treasury's Secretary, Christopher Hui, highlighted that this event has not deterred the government's plan. In response to JPEX's alleged fraud, Hong Kong is tightening its crypto regulations and the Securities and Futures Commission (SFC) is working with police to combat illegal crypto activities. Furthermore, the government's future Web3 regulatory framework will issue guidance on tokenized securities and tokenization of SFC-authorized investment products. Additional crypto regulations will also cover off-platform trades.
After a recent $165 million scandal with JPEX, a crypto exchange, the Hong Kong government reaffirms that it will not dampen its aspirations for Web3 in the region. At Hong Kong Fintech Week on Nov. 2, Christopher Hui, the region's Secretary for Financial Services and the Treasury, mentioned in a keynote speech that the scandal had no significant effect on the government's strategy. He emphasized that their commitment to developing the Web3 market remains steady despite questions surrounding JPEX debacle.
Hui's statement was in correlation to the alleged financial fraud involving JPEX, a Dubai-based crypto exchange allegedly deceiving approximately 2,500 locals. This act was met with a strong reaction from the Securities and Futures Commission (SFC), resulting in a warning against JPEX for promoting its services without a license within the local region.
In response to JPEX's controversial activities, the Hong Kong government declared a stricter approach to its crypto regulations. A collaboration has also been established between the SFC and the police to tackle illegal activities related to crypto exchange. Moreover, amendments have been made on the region's policies about crypto sales and requirements.
According to Hui, several regulatory modifications are currently in progress, which comes as a part of their future Web3 regulatory framework plan. This plan includes the SFC delivering guidelines on tokenized securities as well as tokenization of SFC-approved investment products.
As part of the expanded crypto regulations, the scope has been broadened to include trading that occurs outside regulated platforms. A much-anticipated joint consultation on stablecoins will soon be released by the Hong Kong Monetary Authority (HKMA) and the Financial Services and Treasury Bureau, based on feedbacks from an HKMA discussion paper released in January.
Earlier this year, there were reports of HKMA pushing banks to extend their services to crypto companies in the region. In response, Hui affirmed that the HKMA will seek industry opinion on how banks can provide custodial services for digital assets.
Published At
11/2/2023 4:23:39 AM
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