Hong Kong regulators are intensifying their scrutiny of the cryptocurrency market following the arrest of six individuals in connection with an alleged fraud case centered around an unlicensed crypto exchange known as JPEX.
On September 19th, Hong Kong Chief Executive John Lee Ka-Chiu addressed the media, emphasizing the government’s commitment to bolstering investor awareness.
He urged investors to exclusively utilize platforms authorized by the Securities and Futures Commission (SFC), as reported by the Associated Press.
The JPEX controversy first came to light on September 13th when the SFC alerted the public to more than 1,000 complaints regarding the unregistered crypto exchange.
These complaints alleged losses exceeding 1 billion Hong Kong dollars, equivalent to $128 million.
In its official warning, the SFC pointed out that JPEX had aggressively marketed its services and products to the Hong Kong public, leveraging online celebrities and over-the-counter money changers for promotion.
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As the problems surrounding JPEX gained public attention, numerous platform users found themselves unable to withdraw their funds, while others lamented reductions in their wallet balances.
In response to the regulatory warning, JPEX reportedly raised its withdrawal fee to an exorbitant $1,000 in a bid to dissuade users from liquidating their assets.
Subsequently, the crypto exchange attributed the ongoing liquidity crisis to third-party market makers.
Hong Kong police also apprehended influencer Joseph Lam, also known as Lin Zuo, in connection with JPEX.
Hong Kong had positioned itself as a burgeoning crypto hub in 2023, fostering a pro-crypto regulatory environment and facilitating access to the crypto trading market for retail investors.
However, unlicensed platforms like JPEX exploited the lack of knowledge and awareness among many users in the country.
In response, the regulatory authority has embarked on an educational campaign, aiming to enlighten individuals about the importance of exclusively engaging with licensed platforms for their cryptocurrency trading activities.
This proactive stance underscores Hong Kong’s commitment to fostering a safe and transparent crypto ecosystem, protecting investors, and maintaining its position as a reputable global financial center.
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