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<p>The post <a rel="nofollow" href="https://coinpedia.org/news/is-jpex-facing-the-same-catastrophe-as-ftx-exchange-heres-what-happening/">JPEX Scandal in Hong Kong Rings Alarm Bells: Crypto Regulations to Become Stricter</a> appeared first on <a rel="nofollow" href="https://coinpedia.org">Coinpedia Fintech News</a></p> 
<p>In recent news, the <a href="https://coinpedia.org/crypto-live-news/hong-kong-police-arrest-11-in-jpex-cryptocurrency-fraud-investigation/">JPEX</a> virtual asset trading platform in Hong Kong has been put under the spotlight due to suspected involvement in a major fraud case. This situation has raised questions about how well the current rules for cryptocurrencies are working. Xu Zhengyu, a well-known financial expert, has urged for tighter oversight in this industry. </p> 
<p>Join us as we explore the JPEX scandal and the need for clear rules for cryptocurrencies.</p> 
<h2 class="wp-block-heading" id="strong-concerns-voiced-by-hui-ching-yu-strong"><strong>Concerns Voiced by Hui Ching-yu</strong></h2> 
<p><a href="https://apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/doc?refNo=23PR116">Hui Ching-yu</a>, the Secretary for Financial Services and the Treasury, shared his worries during an interview about an investment committee. He stressed that the JPEX scandal shows why we need better rules for virtual assets. He also pointed out a big gap in the rules — the lack of a framework for stablecoins.</p> 
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter">
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   <p lang="en" dir="ltr">BREAKING:<img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f1ed-1f1f0.png" alt="🇭🇰" class="wp-smiley" style="height: 1em; max-height: 1em;"> The Secretary for Financial Services and the Treasury of Hong Kong stated that retail stablecoins trading will not be allowed until the full policy on stablecoins is introduced next year.<a href="https://twitter.com/hashtag/bitcoin?src=hash&amp;ref_src=twsrc%5Etfw">#bitcoin</a> <a href="https://twitter.com/hashtag/crypto?src=hash&amp;ref_src=twsrc%5Etfw">#crypto</a> <a href="https://t.co/h6z28nGbR3">pic.twitter.com/h6z28nGbR3</a></p>— Crypto Macro (@cryptomacro14) <a href="https://twitter.com/cryptomacro14/status/1710201703990186421?ref_src=twsrc%5Etfw">October 6, 2023</a>
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<p><strong>Risks of Unregulated Platforms</strong></p> 
<p>While speaking in a live online program of the Investment and Financial Education Committee, Xu Zhengyu talked about the big risks tied to unregulated virtual asset trading platforms. These platforms often lack transparency and may operate without stability or reliability. In the event of disputes or platform failures, investors have limited avenues for recourse, potentially resulting in substantial financial losses. </p> 
<p>Notable incidents, like <strong>FTX’s</strong> collapse overseas and the recent <strong>JPEX</strong> case in Hong Kong, serve as stark reminders of these risks.</p> 
<p>Also Read: <a href="https://coinpedia.org/crypto-live-news/hong-kong-sfc-blacklists-suspicious-crypto-platforms-amidst-jpex-scam/">Hong Kong SFC Blacklists Suspicious Crypto Platforms Amidst JPEX Scam!</a></p> 
<h2 class="wp-block-heading" id="strong-the-volatile-nature-of-stablecoins-strong"><strong>The Volatile Nature of Stablecoins</strong></h2> 
<p>Many virtual asset trading platforms use stablecoins like USDT for trading. Xu Zhengyu stressed that these coins need to be stable, backed by US dollars or gold. But, in the past, stablecoins have had big price swings or even crashed. Xu pointed out that how stablecoin issuers manage their reserves directly affects the coin’s stability and whether investors can redeem fiat currencies. </p> 
<p>Because of these issues, Hong Kong won’t let regular folks trade stablecoins until there are solid rules in place.</p> 
<h2 class="wp-block-heading" id="strong-rules-for-trading-platforms-strong"><strong>Rules for Trading Platforms</strong></h2> 
<p>To safeguard investor interests and prevent conflicts of interest, Huang Lexin, Director of the Licensing Section and Head of the Financial Technology Group of the Intermediary Department of the SFC, outlined certain restrictions for licensed virtual asset trading platforms. These platforms are prohibited from offering various investment products, including periodic “pledges,” interest collection services, deposits, and derivatives transactions.</p> 
<p>Read More: <a href="https://coinpedia.org/crypto-live-news/hong-kong-forms-joint-task-force-to-monitor-crypto-exchange-activity/">Hong Kong Forms Joint Task Force to Monitor Crypto Exchange Activity!</a></p> 
<p>Huang Lexin also noted that SFC-licensed <a href="https://apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/doc?refNo=23PR113">virtual asset trading platforms</a> are limited to facilitating the purchase and sale of Bitcoin (BTC) and Ethereum (ETH) for retail investors. Any introduction of new currencies on these platforms must adhere to stringent reporting requirements and obtain approval from the China Securities Regulatory Commission before becoming available for trading.</p> 
<p><strong>Do you think regulations like these are necessary or do they restrict investor rights?</strong></p>

JPEX Scandal in Hong Kong Rings Alarm Bells: Crypto Regulations to Become Stricter

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