JPEX

He indicated on Tuesday that crypto companies drawn by the city’s push to create a <a href="https://financefeeds.com/hong-kong-warns-unlicensed-crypto-platforms/">crypto hub</a> should expect an exacting regulatory regime. 
The scrutiny comes in response to the recent arrest of eight individuals involved in alleged fraud at an unlicensed cryptocurrency exchange. The fraud impacted more than 1,600 investors and over $150 million in assets. Those arrested include social media influencers who promoted the JPEX cryptocurrency exchange, as well as employees of JPEX. 
“This incident highlights the importance that when investors want to invest in virtual assets, then they must invest on platforms that are licensed. The SFC will monitor the situation very closely and ensure that investors are sufficiently protected,” Hong Kong's leader told reporters. 
The Securities and Futures Commission (SFC) said it had received over 1,400 complaints against JPEX, with losses totaling more than 1 billion Hong Kong dollars. Additionally, some investors complained of being unable to withdraw their assets from JPEX accounts and noted discrepancies in their account balances, including reductions and alterations. 
The city’s securities watchdog explained that the investors who were defrauded by JPEX were mostly inexperienced and had fallen for promises of high yields and low risks. <a href="https://financefeeds.com/okx-onboards-10k-users-within-one-month-of-launch-in-hong-kong/">The SFC</a> is investigating whether JPEX violated the anti-money laundering ordinance after it referred the case to the police to assist in their investigation. 
JPEX had been <a href="https://financefeeds.com/hashkey-becomes-first-hong-kong-sfc-regulated-crypto-exchange-to-serve-retail-users/">operating in Hong Kong</a> for more than two years and run aggressive advertising campaigns, including placing ads in MTR stations in Central, Mong Kok, Tsim Sha Tsui, and Causeway Bay. 
Actor-singer Julian Cheung Chi-lam has been featured on JPEX publicity materials as a brand ambassador since last August. His agent told local media that they had never agreed to run the campaign before JPEX secured a license. 
JPEX halted trading activities on its platform last week, claiming that it is currently engaged in negotiations with third-party market makers to address the liquidity issues it faces. It then complained of what it termed "unfair treatment by relevant institutions" in Hong Kong and accused an undisclosed third-party market maker of intentionally freezing funds. 
As of Tuesday, law enforcement had frozen bank accounts totaling 15 million Hong Kong dollars ($1 million) and confiscated three properties valued at 44 million Hong Kong dollars ($5.6 million).

Hong Kong to tighten crypto regulations after $150M JPEX scam

FinanceFeeds

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