Crypto News- The Hong Kong Securities and Futures Commission (SFC) has issued a stern warning, unveiled on Wednesday, targeting the cryptocurrency exchange JPEX Crypto. The SFC has accused JPEX Crypto of exhibiting ‘suspicious features’ and disseminating deceptive information regarding its licensing status.
Hong Kong warns that JPEX Crypto is misleading investors
The SFC’s statement, posted on its official website, reveals that online influencers and over-the-counter virtual asset money changers (OTC shops) have been propagating false or misleading claims regarding JPEX’s supposed application for a virtual asset trading platform (VATP) license in Hong Kong. The regulatory body, which serves as the city’s primary financial overseer, firmly stated, ‘No entity within the JPEX Crypto group holds a license from the SFC, nor have they submitted an application to the SFC for the operation of a VATP in Hong Kong.’
In light of these developments, the SFC has issued a cautionary message to investors, urging them to exercise extreme caution when encountering investment opportunities that appear too good to be true. The regulator further emphasized that investment advice frequently found on social media platforms is often dispensed by compensated promoters, rather than qualified investment professionals.
This warning from the SFC underscores the importance of diligence and due diligence when navigating the cryptocurrency landscape, especially in the face of increasingly sophisticated scams and deceptive practices.
The Hong Kong Securities and Futures Commission (SFC) has intensified its efforts to curb unregulated cryptocurrency activities within the city by issuing a warning against the cryptocurrency exchange JPEX. The SFC has taken proactive measures by notifying influential individuals, opinion leaders, and over-the-counter (OTC) shops involved in the promotion of JPEX and its associated services and products. The regulatory authority has firmly requested that these entities cease any promotional activities related to JPEX Crypto.
JPEX’s website has also come under scrutiny, as it claimed to be ‘licensed and recognized’ by multiple overseas regulators for facilitating the trading of virtual assets—a statement that the SFC has categorically labeled as ‘false.’
In response to the SFC’s allegations, JPEX has released a statement on its website, expressing its commitment to pursuing a license. The company asserted its determination to establish an ideal Web 3.0 community and emphasized its consistent compliance with regulatory and licensing requirements across various regions.
The SFC’s recent warning aligns with its broader objective of regulating cryptocurrency activities in the city. As part of Hong Kong’s endeavors to establish itself as a cryptocurrency hub, the SFC introduced its Virtual Asset Trading Platform (VATP) regulatory framework in June. This framework mandates that exchanges serving retail customers must apply for and receive regulatory approval within a one-year grace period.
The SFC’s statement concerning JPEX follows its previous announcement a little over a month ago, in which the regulatory body highlighted that certain cryptocurrency trading platforms were disseminating false claims about their adherence to the new regulatory framework and offering services and products that contravened its rules.
Within the framework of the licensing regime, retail trading is limited to cryptocurrencies with substantial market capitalization, such as Bitcoin and Ethereum. However, JPEX’s website appears to offer a range of other virtual assets, including ‘derivatives’ and ‘staking’ products, which raises concerns regarding compliance with the regulatory framework. The SFC’s notice issued on Wednesday identified various additional issues related to JPEX. These concerns encompassed promises of unusually high investment returns, reports of investors encountering difficulties when attempting to withdraw assets, and misleading assertions that the exchange had formed partnerships with and secured investments from a Hong Kong-listed company.
The SFC underscored the need for local investors to exercise caution when engaging with unregulated Virtual Asset Trading Platforms (VATPs). Such platforms pose inherent risks, including potential loss of funds in the event of platform closure, bankruptcy, hacking incidents, or misappropriation of assets, which could leave users with limited recourse.
This caution from the SFC arrives on the heels of warnings from Legislative Council member Duncan Chiu, who expressed concerns about criminals exploiting Hong Kong’s support for cryptocurrencies to conduct illicit activities. Chiu also noted instances of investors disseminating exaggerated and misleading advertising content. He called upon regulatory and law enforcement agencies to take measures to prevent such activities and urged the SFC to disclose information about operators that had no intention of seeking licenses or were operating without proper licensing, enabling the public to avoid engaging with potentially problematic platforms.
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