JPEX scandal causes Hong Kong to lose trust in crypto, survey finds

• The survey discussed in detail the changing attitude of Hong Kong residents towards crypto assets.
• 41% of the respondents said they preferred not to hold crypto assets.

The JPEX crypto scam had led to a significant trust deficit around crypto assets in Hong Kong.

The School of Business and Management at the Hong Kong University of Science and Technology published the findings of an ongoing survey on 17 October. The survey discussed in detail the changing attitude of Hong Kong residents towards crypto assets.

From September to October, 41% of the respondents said they preferred not to hold crypto assets. It signified a rise of 12% from earlier this year (April-May).

Following the JPEX crypto scam, only 20% of the respondents surveyed in the current month expressed a willingness to hold crypto in the future. It signified a 5% drop from earlier this year.

The second survey began on 28 September and will end on 20 October. A total of 2,200 people responded as of 5 October.

During the first four-week-long survey conducted between 24 April – 23 May, a total of 5,700 people aged 18 or above took part.

How Hong Kong is adopting to an evolving crypto landscape

The JPEX scandal broke out in mid-September when the country’s financial regulator, the Securities and Futures Commission (SFC), issued a warning about the unauthorized activities at the exchange.

At first, JPEX questioned the regulator’s commitment to a crypto-friendly environment in Hong Kong. It nonetheless outlined its commitment to align with regulatory requirements.

Within a few days, the police arrested a number of individuals associated with JPEX in Hong Kong. The masterminds behind the scheme remain at large.

As a result of the scandal, the SFC and the Hong Kong Police Force (HKPF) decided to create a dedicated crypto-focused working group.

Hong Kong is one of the leading Asian regions where crypto regulation has been evolving with time.

Authorities in Hong Kong issued a series of crypto-related policy statements in October 2022. The action suggested that it might reopen to ventures focusing on digital assets.

In December 2022, the Legislative Council passed an amendment establishing a full licensing mechanism for crypto platforms offering retail trading services.

In May 2023, the country’s securities regulator announced plans to provide retail investors with access to virtual asset platforms.

A Forex Suggest study published in July 2022 revealed Hong Kong’s position as the best-prepared country for widespread cryptocurrency adoption, with a crypto-readiness score of 8.6.

Source: Forex