In a move to bolster retail investors' protection, Hong Kong's Securities and Futures Commission (SFC) has announced a series of new measures this week. These initiatives come on the heels of the JPEX crypto exchange debacle, which exposed vulnerabilities in the city's regulatory framework for virtual assets. The SFC's new measures aim to enhance transparency, improve public awareness, and tighten regulations around crypto trading platforms.
JPEX Blowup Prompted Response from Hong Kong Regulator
In June 2023, Hong Kong opened up to retail cryptocurrency trading, significantly relaxing the country's existing rules. However, the number of licensed platforms that could provide these services remains small, a fact exploited by other, unregulated entities to attract new customers. One such exchange was JPEX, which is now facing serious issues with the withdrawal of investor funds.
To combat the disinformation, the SFC plans to publish a comprehensive list of licensed Virtual Asset Trading Platforms (VATPs) on its website. This list will include currently licensed platforms, those in the application process, and entities that have been ordered to shut down or are deemed suspicious. The regulator believes this transparent approach will help investors decide which platforms to engage with.
????Hong Kong to Reveal Crypto License Applicants Post-JPEX InvestigationIn response to public demand and following the JPEX probe, Hong Kong’s Securities and Futures Commission (SFC) will disclose a list of all crypto exchange license applicants. This move aims to highlight… pic.twitter.com/nwo215N81v
— SourceFeed (@SourceFeed_) September 25, 2023
In addition to enhancing transparency, the SFC is launching a public campaign to educate people on protecting themselves against fraud. The commission is committed to investigating and prosecuting illegal platforms. To this end, the SFC is ramping up its intelligence-gathering efforts on businesses related to virtual assets.
"The SFC will, within its statutory powers, continue to strengthen its intelligence gathering process towards different businesses related to virtual assets. It will continue to take follow-up and enforcement actions against suspicious VATPs that may have violated the law, and refer cases to the Police when necessary," the SFC commentedin the official press release.
The planned actions presented by SFC were summarized in the table below:
Update on JPEX Case
Over the weekend, 11 individuals connected to the JPEX case were arrested, and authorities are seeking Interpol assistance to apprehend the exchange's leaders. Some cryptocurrencies linked to the fraud have also been frozen. More than 1,400 complaints have been filed against the trading platform, indicating losses exceeding HKD 1 billion, or approximately $127.9 million.
Additionally,Finance Magnates disclosed last Monday that local authorities detained financial influencer Joseph Lam Chok due to his online promotion of the troubled exchange. The arrest occurred just a few hours following the exchange's latest issues.
Hong Kong's Social Media Sensation, Joseph Lam, Arrested in Daring HK$34 Million JPEX Crypto Scandal! pic.twitter.com/zSUlXRZRTM
— Crypto University (@TheCryptoU) September 18, 2023
The SFC stated that it would continue to review the regulatory landscape in Hong Kong and take timely measures in response to new market developments.
"Adhering to the 'same business, same risks, same rules' principle, the SFC will work with the HKSAR Government to regularly review the regulatory regime in Hong Kong and consider timely measures in light of new market developments. These measures may include regulation of VA-related businesses other than the VATPs," the regulator added.
The SFC has been proactive in identifying the potential benefits and risks associated with digital finance and virtual asset activities. Under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, which came into full effect on 1 June 2023, the SFC has closed gaps in its licensing and supervision powers over VATPs. The regulator has imposed stringent requirements to ensure investor protection, including enhanced due diligence and robust governance measures.
This article was written by Damian Chmiel at www.financemagnates.com.
You can get bonuses upto $100 FREE BONUS when you:
💰 Install these recommended apps:
💲 SocialGood - 100% Crypto Back on Everyday Shopping
💲 xPortal - The DeFi For The Next Billion
💲 CryptoTab Browser - Lightweight, fast, and ready to mine!
💰 Register on these recommended exchanges:
🟡 Binance🟡 Bitfinex🟡 Bitmart🟡 Bittrex🟡 Bitget
🟡 CoinEx🟡 Crypto.com🟡 Gate.io🟡 Huobi🟡 Kucoin.
Comments