Hong Kong has increased its scrutiny on crypto exchanges following the collapse of the unlicensed exchange JPEX last month. JPEX had fraudulently taken $204 million from investors leading to multiple arrests, and the platform's services being shut down. To further strengthen the monitoring and investigation of illegal activities related to virtual asset trading platforms, the city has set up a task force composed of the Securities and Futures Commission, and the representatives from commercial crime, cyber security and technology crime, and financial intelligence and investigations police bureaus. Hong Kong is proactively promoting the concept of a regional crypto and fintech hub by introducing a regulatory framework for crypto assets, and issuying the first mandatory licenses for digital asset trading platforms this year. Consultant Vince Turcotte of Cognitive GRC believes this will help increase the trust among individuals and business on conducting transactions online in virtual assets.

The JPEX saga is also being seen as a major challenge to the concept of a better crypto experience for investors. Assistant commissioner of Police, Eve Chung, believes the task force working group plays an integral role in collecting intelligence and making sure illegal activities related to virtual asset trading platforms are taken care of, so as to protect the general public’s interests. To further emphasise this, the authorities had asked relevant influencers and opinion leaders to stop promoting JPEX and its services, in addition to arresting a 19th suspect in the case, and impounding his Porsche.

JPEX has recently announced a plan to convert users’ assets to shareholder dividends, payable in two years. However, there are doubts about the return of users’ funds, as the firm had apparently managed to get 68% of its users to vote in favour of the dividends project. While the Hong Kong police has impounded assets related to the JPEX case, it is still uncertain if the investors’ money will be completely recovered.



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