Key Takeaways

Hong Kong’s Securities and Futures Commission (SFC) has provided details on its investigation into the unlicensed virtual asset trading platform JPEX.

Over 2,000 people have reported being defrauded by JPEX, involving more than HKD 1.4 billion.

SFC CEO Leung Fung-yee emphasizes that the incident will not change Hong Kong’s direction in developing a Web3 ecosystem.

Background and Investigation Timeline

The Hong Kong Securities and Futures Commission (SFC) has shed light on its investigation into JPEX, an unlicensed virtual asset trading platform accused of fraud. The platform has received complaints from over 2,000 individuals, involving assets exceeding HKD 1.4 billion. The SFC began monitoring JPEX in early 2022, suspecting false claims on its website and advertisements. By July 2022, the platform was put on a watchlist due to its evasive responses. Formal investigations were initiated in June 2023, leading to an official warning issued on September 13, 2023.

Regulatory Stance

SFC CEO Leung Fung-yee stated that the incident underscores the importance of regulation. She emphasized that Hong Kong’s commitment to developing a Web3 ecosystem remains unchanged. “If there is no regulatory system, investors cannot identify which platforms are relatively safe and reliable,” Leung added.

Ongoing Police Investigation

When asked about the possibility of halting or collaborating with overseas financial regulators to block JPEX’s asset transfers, Christopher Wilson, Executive Director of the Regulatory Enforcement Department, said that the police are currently leading the related investigation and declined to disclose further details.

Transition Period Concerns

Regarding the 12-month transition period for virtual asset platforms to comply with new regulations, Huang Lexin, head of the SFC’s fintech group, said that the arrangement is to give platforms operating in Hong Kong reasonable time to apply for licenses and meet regulatory requirements.

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