Hong Kong Regulators Tighten Crypto Market Controls Following JPEX Fraud Incident
Summary:
Following the arrest of six people related to an unlicensed crypto exchange, JPEX, Hong Kong's regulators are beefing up controls on the crypto market. JPEX has reportedly received over 1,000 customer complaints about collective losses exceeding $128 million. Upon issuing a warning about JPEX, the Securities and Futures Commission (SFC) is initiating investor education campaigns to promote the use of licensed crypto exchanges. This move follows the pattern of fraudulent unlicensed platforms exploiting uninformed users, despite Hong Kong's pro-crypto stance since 2023.
In light of the recent arrest of six people linked to an unlicensed cryptocurrencies platform named JPEX, Hong Kong's governing authorities are ramping up efforts to secure the cryptocurrency market. John Lee Ka-chiu, Hong Kong's chief executive, communicated to the press on September 19th, that the government plans to elevate its education campaigns, encouraging investors to utilize exchanges with license approval from the Securities and Futures Commission (SFC), as reported by AP News.
Concerns about JPEX surfaced last week upon SFC's announcement that they received over a thousand customer complaints regarding unlicensed cryptocurrency exchanges. These grievances were based on cumulative losses exceeding 1 billion Hong Kong dollars or approximately $128 million, tied to the fraudulent platform. In its warning, the SFC indicated that JPEX was widely advertising its services and products to the general public in Hong Kong, using social media influencers and exchanging money over-the-counter.
As the SFC warning shed light on the issues with JPEX, several platform users encountered problems when trying to extract their funds. Some reported diminished wallet balances, while after the SFC warning, the exchange apparently began charging a $1,000 withdrawal fee to dissuade customers from taking out their investments.
Subsequently, the Hong Kong native and social media influencer, Joseph Lam (Lin Zuo), was arrested by local law enforcement over his connection to JPEX. Hong Kong's cryptocurrency exchange market had been on the rise since 2023, introducing beneficial legislation and enabling retail customers to trade in crypto. Unfortunately, the rise of unregistered platforms, such as JPEX, has led unaware users astray in the country. As a result, the authorities are now concentrating their efforts on informing the public about the importance of dealing with licensed crypto trading platforms exclusively.
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Published At
9/19/2023 8:17:18 AM
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