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In a city known for its towering skyscrapers, bustling street markets, and a culinary scene that can make your taste buds do the cha-cha, Hong Kong is no stranger to financial drama and intrigue.&nbsp; 
The Hong Kong Police and the Securities and Futures Commission (SFC) have recently taken crypto measures that are so heavy to ensure the future of crypto in the city. It’s all in response to the JPEX saga, a crypto adventure that has left crypto to question. 
<h2 class="wp-block-heading" id="hong-kong-takes-steps-to-secure-its-global-crypto-hub-status">Hong Kong takes steps to secure its global crypto hub status</h2> 
Hong Kong’s securities regulator and police force have established a task force to aid in the detection of suspicious activity at crypto exchanges, intensifying their supervision of the industry in the wake of the JPEX platform’s collapse. 
Authorities allege that the unlicensed crypto platform defrauded investors of at least HK$1.6 billion ($204 million) and have arrested at least 20 individuals in connection with the investigation. 
The SFC stated in a statement released on October 4 that the group was established following a September 28 meeting with the HKPF in response to ongoing arrests and developments involving the Dubai-based JPEX exchange. 
The city’s Securities and Futures Commission and law enforcement officials will “enhance collaboration in monitoring and investigating illegal activities related to virtual-asset trading platforms,” according to a statement released by the financial watchdog late Wednesday. 
The group consists of representatives from the SFC’s enforcement division and HKPF representatives from its commercial, cybersecurity, financial intelligence and investigations, and investigations bureaus. 
<h2 class="wp-block-heading" id="the-regulatory-aftermath-of-the-jpex-saga">The regulatory aftermath of the JPEX saga</h2> 
Christopher Wilson, director of enforcement for the Securities and Futures Commission, stated in a statement that the SFC was eager to deploy its resources to combat “problematic VATPs and protect the interests of investors.” 
Since then, the SFC has published a list of all licensed, presumed licensed, closing, and application-pending exchanges, as well as a list of “suspicious VATPs.” 
Assistant Commissioner of Police (Crime) for the Hong Kong Police Force Eve Chung stated that the working group is instrumental in exchanging intelligence and jointly responding to “challenges arising from VATPs, to better protect the general public in Hong Kong.” 
The JPEX crypto exchange has announced plans to proceed with its <a href="https://jp-ex.io/en/home" rel="nofollow noopener" target="_blank">DAO Stakeholder</a> Dividend Plan despite ongoing regulatory concerns.&nbsp; 
<a href="https://www.cryptopolitan.com/how-hong-kong-and-macau-seized-3m-from-jpex/">JPEX</a> had previously presented its consumers with the DAO (decentralized autonomous organization) Stakeholder Dividend Plan.&nbsp; 
The proposition was approved with 68% of the vote, according to a blog post from the exchange.&nbsp; 
Under the dividend scheme, investors have the option to convert their assets at a 1:1 ratio into DAO stakeholder dividends, with the ability to claim these dividends two years later. According to the exchange, users who contribute new assets to this plan can potentially see their payouts double. 
These dividends will include revenue derived from listing fees for new platform tokens, trading fees from spot and derivative products, and corresponding JPEX coins based on the dividend proportion of the shareholder.&nbsp; 
<a href="https://www.cryptopolitan.com/jpex-faces-controversy-on-dao-transition/">JPEX</a> has pledged to distribute 49% of the shareholder dividends, amounting to $400 million. 
<h2 class="wp-block-heading" id="the-regulatory-repercussions">The regulatory repercussions</h2> 
The saga threatens to complicate Hong Kong’s efforts to establish a global home for the digital asset industry in an effort to restore its reputation as an innovative financial hub. The city’s reputation has suffered as a result of allegations of diminished autonomy from China and recollections of prolonged Covid-related restrictions. 
Hong Kong implemented a new regulatory framework for virtual assets in the middle of the year and issued the first trading platform licenses in August. 
<blockquote class="wp-block-quote"> 
 This strengthens the reputation of Hong Kong as a safe and compliant jurisdiction to do business in virtual assets […] The formation of the task force is a proactive step to shore up confidence in the new regime. <cite>Crypto regulation expert</cite>
</blockquote> 
Officials are seeking to learn the lessons of 2022’s crypto bear market and ensuing bankruptcies by ensuring investors are protected while also creating clear paths for companies to get permits. 
Additionally, jurisdictions such as Dubai, Singapore, and the European Union have developed crypto frameworks, whereas the status of digital assets in the United States remains unclear. 
One crypto regulatory expert says that “the announcement of the combined task force should be welcome news for everyone engaged in legitimate cryptocurrency trading and another clear, black-and-white warning to those who operate in shades of gray.”

Hong Kong Police and SFC take heavy crypto measures after the JPEX saga

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