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Hong Kong strengthens crypto regulation after JPEX fraud case.

Hong Kong regulators are taking decisive measures to strengthen oversight of the crypto market following the arrest of six individuals involved in alleged fraud connected to an unlicensed crypto exchange known as JPEX.

On September 19, Hong Kong Chief Executive John Lee Ka-Chiu addressed the media, announcing the government’s commitment to intensify efforts in educating investors.

He emphasized the importance of utilizing only those platforms that hold Securities and Futures Commission licenses, as reported by the Associated Press.

The JPEX issue gained prominence on September 13 when the Securities and Futures Commission (SFC) publicly disclosed receiving more than 1,000 complaints regarding the unregistered crypto exchange.

These complaints alleged losses exceeding HKD 1 billion ($128 million).

In its advisory, the SFC highlighted that JPEX had been promoting its services and products to the Hong Kong public through the use of online celebrities and over-the-counter money changers.

As news of the issues surrounding JPEX surfaced, numerous platform users encountered difficulties in withdrawing their funds, leading to complaints of reduced wallet balances.

After the Hong Kong watchdog issued a warning to the exchange, reports emerged indicating that JPEX had raised its withdrawal fee to $1,000, seemingly discouraging users from attempting to withdraw their assets.

JPEX Crypto Exchange Faces Liquidity Crisis and Influencer Arrest in Hong Kong

JPEX

In the midst of an ongoing liquidity crisis on the platform, the crypto exchange, JPEX, attributed the situation to third-party market makers.

This crisis led to the subsequent increase in the withdrawal fee.

Additionally, influencer Joseph Lam (Lin Zuo) faced arrest by Hong Kong police in connection with JPEX.

Hong Kong emerged as a thriving crypto hub in 2023, implementing pro-crypto legislation and opening the retail crypto trading market.

However, the rise of unlicensed platforms like JPEX has resulted in the deception of many users in the country, primarily due to a lack of knowledge and awareness.

Consequently, regulatory authorities are actively engaged in educating individuals about the importance of utilizing licensed platforms for their crypto trading activities.

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