The Securities and Futures Commission (SFC) of Hong Kong, in collaboration with the Hong Kong Police, has announced the formation of a special group to monitor and investigate crimes related to crypto exchanges. This initiative is a response to the ongoing controversies surrounding the JPEX exchange, a leading Hong Kong crypto entity based in Dubai.
The primary objective of the newly established group is to monitor unlawful activities associated with virtual assets trading platforms (VATPs) within the Hong Kong territory. This move comes as a result of accusations that JPEX was advertising its services without the necessary license from the SFC, leading to the loss of approximately $166 million and affecting over 2,086 investors.
Hong Kong authorities have taken decisive action by detaining 18 individuals believed to be linked to the JPEX incident. This situation has highlighted the need for enhanced crypto regulation and oversight in Hong Kong. As a result, JPEX has suspended its crypto asset operations in Hong Kong.
Angelina Kwan, a former SFC official, has previously advocated for stricter regulations on the virtual assets market in Hong Kong. With the formation of this new group, there is now a dedicated team to monitor VATP illegalities, report suspicious activities, evaluate risks and threats, and participate in related investigations. The team consists of officials from various departments within the Hong Kong Police and representatives from the SFC’s enforcement division.
The SFC has also released a list of licenses, including unlicensed and suspect VATPs, as well as those on the verge of shutting down. Investors are advised to exercise caution when trading digital currencies on platforms that are not regulated and to be aware of the potential risks involved.
The JPEX incident serves as a reminder of the potential pitfalls in the cryptocurrency market and presents an opportunity for regulatory bodies to refine their strategies. Proactive measures like the formation of specialized groups can contribute to a safer and more transparent financial future.