Grace Period for Crypto Exchanges in Hong Kong Unchanged Despite Recent JPEX Scandal Resulting in $180M in Losses
Crypto News

Grace Period for Crypto Exchanges in Hong Kong Unchanged Despite Recent JPEX Scandal Resulting in $180M in Losses

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Created 4mo ago, last updated 4mo ago

Recent scandals have not led to the removal of Hong Kong's one-year grace period for cryptocurrency exchanges, according to local news reports.

Grace Period for Crypto Exchanges in Hong Kong Unchanged Despite Recent JPEX Scandal Resulting in $180M in Losses
Recent scandals have not led to the removal of Hong Kong's one-year grace period for cryptocurrency exchanges, according to local news reports. Julia Leung, the CEO of Hong Kong's Securities and Futures Commission, acknowledged that fraud could persist even after the grace period concludes, indicating that there are no immediate plans to alter the grace period or other measures.

Implemented in June, new regulations state that cryptocurrency exchanges operating in Hong Kong must acquire a virtual asset service provider (VASP) license from the city's Securities and Futures Commission by June 2024. However, unregistered exchanges are currently allowed to continue their operations during the transitional phase.

Hong Kong has recently experienced several crypto-related scandals. In September, unlicensed crypto exchange JPEX collapsed due to allegations of a Ponzi scheme, resulting in 66 arrests and approximately 1.6 billion Hong Kong dollars ($205 million) in losses.
On November 25, another unlicensed exchange named Hounax reportedly defrauded HK victims of 148 million HKD ($18.9 million) through a suspected Ponzi scheme. The scammers posed as investment experts, enticing users with promises of substantial returns. However, when users attempted to withdraw their funds, they discovered that it was not possible.

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