Hong Kong to List 'Suspicious' Crypto Platforms in Wake of JPEX Scandal

One of Hong Kong's principal financial regulators, the Securities and Futures Commission (SFC), has vowed to step up efforts to combat unregulated cryptocurrency trading platforms in its jurisdiction.

According to a Sept. 25 announcement, the SFC said it would publish a list of all licensed, deemed licensed, closing down, and application-pending virtual asset trading platforms (VATPs) to better help members of the public identify potentially unregulated VATPs doing business in Hong Kong.

The SFC said it will also keep a dedicated list of "suspicious VATPs," which will be featured in an easily accessible and prominent part of the regulators' website.

The new rules come immediately in the wake of the ongoing JPEX crypto exchange scandal, an affair that local media outlets are describing as one of the worst cases of financial fraud to ever hit the region. JPEX stands accused of promoting its services to Hong Kong residents despite not having applied for a license in the country.

Speaking at a Sept. 25 press briefing on the new rules and the JPEX scandal, Christopher "Kit" Wilson, director of enforcement at the SFC, explained that due to "evasive" behavior from stakeholders and unsatisfactory responses to requests for information, JPEX was placed on the alert list in July 2022.

Wilson shared that the SFC then launched a complex investigation involving multiple parties across a range of jurisdictions, which escalated in April 2023 after the organization received its first official investor complaint.

The financial fallout from JPEX is estimated to have reached around $178 million at the time of publication, with local police having received more than 2,200 complaints from affected users of the exchange.

A total of 11 people, including crypto influencers, YouTubers and employees of the allegedly fraudulent crypto exchange, have been taken into custody for questioning.

(Source: CoinTelegraph)