Hong Kong increases scrutiny of cryptocurrency exchanges after JPEX F Cryptocurrency scrgruppen

The move follows the complex situation that occurred at cryptocurrency exchange JPEX last month, which led to multiple arrests and the shutdown of the platform’s services. The unlicensed exchange allegedly defrauded investors of $204 million.

The task force is composed of the city’s Securities and Futures Commission (SFC) and law enforcement officials, including representatives from the commercial crime, cybersecurity, technology crime, and financial intelligence and investigations police offices.

According to the advertisementit “will enhance cooperation in monitoring and investigating illegal activities related to virtual asset trading platforms.”

Hong Kong Public Protection

Furthermore, the JPEX saga threatens to complicate Hong Kong’s bid to become a regional cryptocurrency and fintech hub.

Hong Kong launched a new regulatory framework for crypto assets earlier this year and granted the first compulsory licenses to digital asset trading platforms in August.

Vince Turcotte, a consultant at Cognitive GRC, a cryptocurrency licensing consultancy, said:

“This reinforces Hong Kong’s reputation as a safe and compliant jurisdiction for doing business in virtual assets. The formation of the task force is a proactive step to strengthen confidence in the new regime.”

Officials in Hong Kong are scrambling to learn more about the 2022 cryptocurrency contagion and multiple collapses of high-profile platforms.

Assistant Commissioner of Police Eve Chung said the working group “is playing an active role in fast-tracking the exchange of vital intelligence and joint cooperation in responding to challenges arising from virtual asset trading platforms (VATPs), so as to better protect the public in Hong Kong.” “

In mid-September, the SFC contacted influencers, opinion leaders and OTC outlets, asking them to stop promoting JPEX and its services. Another crackdown on influencers associated with the defunct cryptocurrency exchange followed.

JPEX Dividend Plan

Furthermore, JPEX continued its controversial plan to convert users’ assets into dividends for shareholders that could only be claimed within two years.

The company claims that the move will increase cash flow and investor retention. Users will receive earnings in different forms over two years based on their stake, according to Reports.

JPEX said this week that a poll it conducted with users ended with a 68% vote in favor of the dividend plan.

Meanwhile, police have now arrested the 19th suspect linked to the case and confiscated his Porsche.

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