Hong Kong to tighten crypto regulation in wake of JPEX fraud case

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Hong Kong regulators wish to tighten the noose across the crypto market after the arrest of six people following allegations of fraud round an unlicensed crypto alternate known as JPEX.

John Lee Ka-chiu, the chief govt of Hong Kong, informed reporters on Sept. 19 that the federal government would improve its efforts to tell traders and remind them to solely utilise platforms which were granted SFC licences, reported AP Information.

The JPEX subject got here to the fore final week when the nation’s Securities and Futures Fee (SFC) notified the general public that they’d obtained over 1000 complaints associated to the unregistered crypto alternate platforms with prospects complaining about collectively dropping over $128 million (1 billion Hong Kong received) because of the fraudulent alternate.

The SFC in its warning famous that JPEX was actively selling the platform’s providers and merchandise to the Hong Kong public by on-line celebrities and over-the-counter cash changers.

As the issues with JPEX grew to become public with the warning from the SFC, many customers of the platform discovered themselves unable to withdraw their funds whereas others complained about diminished pockets balances. After the Hong Kong watchdog’s warning to the alternate, the platform reportedly increased its withdrawal fee to $1,0000 to discourage customers from withdrawing their property.

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The crypto exchange later blamed third-party market makers for the continued liquidity disaster on the platform that resulted within the hike of the withdrawal payment. The Hong Kong police additionally arrested influencer Joseph Lam (Lin Zuo) for his affiliation with crypto alternate JPEX.

Hong Kong established itself as a rising crypto hub in 2023 engaged on varied pro-crypto laws and opening the crypto buying and selling marketplace for retail prospects. Nonetheless, unlicensed crypto platforms like JPEX have managed to idiot many customers within the nation resulting from a lack of understanding and consciousness. The regulatory physique is now working to coach individuals on utilizing solely licensed platforms for his or her crypto buying and selling actions.

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