- A crypto fraud scandal shakes Hong Kong’s position as a leading crypto hub.
- Hong Kong financial regulator becomes proactive amid crypto fraud case.
- JPEX plans to convert the crypto exchange into a DAO
Hong Kong is a prominent supporter of the crypto industry. The city is crypto-friendly and home to crypto-focused platforms.
In 2022, Hong Kong took a decisive step towards crypto regulation when its Legislative Council passed the Anti-Money Laundering and Counter-Terrorist Financial Amendment Ordinance Bill.
The AMLO regulation gave effect to the virtual assets licensing regime and the requirements to obtain a VASP license in Hong Kong.
After the ordinance provisions came into effect this year, The Securities and Future Commission took an observatory role in crypto matters until JPEX’s case. A fraud case involving a crypto exchange reveals Hong Kong’s position on the enforcement of crypto regulation.
Hong Kong Financial Regulator Becomes Proactive Over Their Largest Fraud Case
When the Securities and Futures Commission accused JPEX of fraudulent activities and operating as an unlicensed virtual asset provider, the news sent a ripple of interest through the crypto community. Following over 2300 complaints made to the police regarding the suspicious conduct of JPEX, a crypto exchange in the state, and an investigation by the SFC several individuals associated with the exchange were arrested.
The Securities and Futures Commission (SFC) launched into action in collaboration with the police, in compliance with the guidelines of the AMLO ordinance.
Crypto influencers associated with the crypto exchange were arrested and over-the-counter exchanges were raided. Local media reported that over 20 arrests have been made in connection to the mysterious crypto exchange as the search for the masterminds of the fraud continues.
Hong Kong’s Secretary for Security, Chris Tang Ping-keung, vows to bring justice to the affected individuals and apprehend the suspects.
JPEX Plays the Devil’s Role in Hong Kong’s Digital Ambition to Be a Crypto Hub
JPEX Hong Kong is a mysterious crypto exchange and the subject of Hong Kong’s financial watchdog investigation. The company’s Hong Kong branch is the main character in a fraud case involving $178 million.
After SFC began its probe into the exchange, JPEX halted operations citing liquidity issues with third-party market makers.
According to local media, JPEX criticized the SFC’s statement and denied the fraud allegations.
On Wednesday, the mysterious crypto announced its decision to transition into a DAO.
“The platform will begin to operate as a DAO. All holders of dividends from DAO shareholders will be able to obtain voting rights in the future and participate in the platform’s decision-making in the form of referendums,” The post reads.
Hong Kong Crypto Fraud Scandal
The crypto fraud case has gone beyond Hong Kong borders, it has become a matter of interest to the crypto community and investors. Every observer is paying rapid attention to how the case might be the paradigm shift the crypto industry needs in enforcing regulation. However, it is noteworthy that it is a critical time for Hong Kong, as the outcome of the case may determine the next step for the city’s digital ambition.