The Securities and Futures Commission (SFC) in Hong Kong Cracks Down on Unregulated Cryptocurrency Platforms
The Securities and Futures Commission (SFC) in Hong Kong is intensifying its campaign against unregulated cryptocurrency platforms in its territory amid the JPEX cryptocurrency exchange scandal.
In a statement, the regulator indicated that it plans to provide a list of all virtual asset trading platforms (VATPs) that are licensed, considered applications to be licensed, closed, or suspended. This is how the SFC wants to help customers identify potentially unregulated cryptocurrency platforms operating in Hong Kong.
Furthermore, the Commission intends to maintain a special list of “suspicious VAT” and will make it publicly available on its website.
JPEX scandal leads to new rules of the game
The new rules were announced by the SFC shortly after the JPEX cryptocurrency exchange scandal began. Local media describe the case as one of the worst examples of financial fraud ever seen in Hong Kong.
The SEC said that the cryptocurrency influencers and trading platform had made false or misleading statements on social media, suggesting that JPEX had applied for a value-added tax (VATP) license in the region.
The regulator found that JPEX had not applied for a license to operate in Hong Kong despite its claim to be a “licensed and recognized platform for facilitating the trading of digital assets and virtual currency.”
$178 million losses
On September 17, JPEX suspended some operations and increased withdrawal fees amid the liquidity crisis. The platform said third-party market makers maliciously froze funds. The next day, JPEX users were unable to place new orders for Earn products.
According to the latest data, financial losses from JPEX amounted to $178 million. Local police received more than 2,200 complaints from exchange users.
11 people were detained for questioning. Hong Kong police also arrested cryptocurrency blogger Joseph Lam for advertising JPEX and raided his office, seizing boxes of evidence, including several banknotes.
