Hong Kong Regulator Issues Cautionary Warning on Unlicensed Cryptocurrency Exchange JPEX
Crypto News – Hong Kong‘s regulatory body, the Securities and Futures Commission (SFC), has issued a warning to investors regarding JPEX, an unlicensed cryptocurrency exchange operating in the region. The SFC’s announcement on September 13th highlights several concerning aspects of JPEX’s operations.
The SFC emphasized that none of the entities within the JPEX Group have acquired the necessary licensing, nor have they applied for permission to operate as a regulated virtual asset trading platform (VATP). Instead of adhering to regulatory standards, JPEX has been leveraging social media influencers, key opinion leaders (KOLs), and over-the-counter (OTC) cryptocurrency money changers to promote its services to Hong Kong customers.
One of the most alarming aspects noted by the regulator is the presence of false information on JPEX’s website. The exchange falsely claims to be regulated by foreign regulatory agencies as a legitimate VATP. Additionally, JPEX has been advertising high annual yields for specific products, with rates soaring as high as 21%.
The SFC has also received complaints from retail investors who have faced difficulties when attempting to withdraw their assets from the platform or have noticed unexpected changes and reductions in their investments.
Furthermore, the SFC clarified that JPEX’s announcement of a business partnership with a Hong Kong-listed company was inaccurate. The mentioned company had already terminated the partnership and had not made any investments in the cryptocurrency exchange.
In response to the SFC’s warning, JPEX published a separate blog post, stating that it had publicly announced its intention to apply for a crypto trading license in Hong Kong in February 2023. During that period, the platform had plans to offer various services to Hong Kong users, including derivatives, spot trading, and staking, pending regulatory approval. However, JPEX explained that it had not yet submitted the application due to ongoing preparations and document requirements.
JPEX also expressed concerns about the potential impact of the SFC’s statement on Hong Kong’s aspirations to become a hub for web3 technologies. The exchange noted that it felt undue pressure from the regulatory actions and hinted at the possibility of withdrawing its license application in the region. In its statement, JPEX emphasized the perceived unfair suppression by the SFC and argued that the regulatory body should bear responsibility for hindering the development of cryptocurrency in Hong Kong.