Hong Kong Securities and Futures Commission (SFC) Issues Warning Against Crypto Exchange JPEX
The Hong Kong Securities and Futures Commission (SFC) has recently raised concerns about the cryptocurrency exchange known as JPEX. The commission has accused the platform of exhibiting “suspicious features” and disseminating misleading information regarding its licensing status.
In a report by SCMP, the SFC expressed concerns about false and misleading statements made by online influencers and over-the-counter virtual asset money changers regarding JPEX’s supposed application for a virtual asset trading platform (VATP) license in Hong Kong. The SFC clarified that no entity within the JPEX group is regulated by the SFC or has applied for a license to operate a VATP in Hong Kong.
The SFC has urged investors to exercise caution when encountering investment opportunities that appear “too good to be true.” The commission emphasized that investment advice, particularly on social media platforms, may be provided by paid promoters who lack the expertise of investment professionals.
To address this issue, the SFC has taken proactive steps by notifying relevant influencers, opinion leaders, and OTC shops to stop promoting JPEX and its services and products.
One of the key issues raised by the SFC is JPEX’s claim of being “licensed and recognized” to facilitate the trading of virtual assets, citing several overseas regulators. However, the SFC has deemed this claim to be false.
In response, JPEX has maintained its intention to apply for a license, stating, “We are determined to create an ideal Web 3.0 community and have consistently complied with regulations and licensing systems in different regions.”
Besides the licensing status, the SFC has expressed additional concerns about JPEX, including promises of exceptionally high returns, reports of difficulties with asset withdrawals, and false claims about the exchange’s partnership and investment from a Hong Kong-listed company.
The SFC’s warning against JPEX is part of a broader effort to regulate the fast-growing digital assets sector in Hong Kong. Despite the bear market, crypto-related scams in Hong Kong reportedly doubled to approximately $217 million last year.
Earlier this year, the SFC introduced its VATP regulatory framework, requiring exchanges offering services to retail customers to apply for and obtain approval within a one-year grace period. The SFC has directed investors to verify licensed exchanges from its official list, which currently includes HashKey and OSL.
Under Hong Kong’s Anti-Money Laundering and Counter-Terrorist Financing Ordinance, virtual asset fraud could result in fines of up to $1.3 million and imprisonment for up to 10 years.
The SFC’s warning serves as a reminder for investors to exercise caution and thoroughly research any crypto exchange or investment opportunity before getting involved, especially in a market where scams and misleading information are prevalent.
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