Hong Kong’s Securities and Futures Commission is improving investor education and information dissemination on virtual asset trading platforms, following a major crypto scandal involving more than 2,000 alleged victims.
The SFC announced a series of measures on Sunday, including publishing several lists of virtual asset trading platforms (VATPs), such as those licensed, in the midst of closing down or those deemed licensed platforms, seeking to ensure transparent and timely dissemination of information to the public.
The SFC’s announcement comes just days after intensifying its probe into JPEX, a purported crypto trading platform embroiled in what is being termed Hong Kong’s largest-ever financial fraud case.
The number of alleged victims of the JPEX scandal has now surged to 2,305, with losses totaling HK $1.43 billion ($182.9 million), local media reported. Last week, authorities froze bank accounts valued at HK $15 million ($1 million) and confiscated three properties worth some HK $44 million ($5.6 million), related to JPEX.
At the same time, SFC categorically disavowed any engagement with JPEX, stating the unlicensed platform had falsely claimed to have approached the regulator for a potential license.
The SFC said it had already placed JPEX on its Alert List in July 2022 following allegations of non-cooperation and a failure to meet the SFC’s requirements.
In light of the JPEX incident, the SFC has also moved to enhance its Alert List by adding a dedicated section for suspicious VATPs and considering providing more early-stage information to alert investors.
Obeying the rules
Under its new Anti-Money Laundering and Counter-Terrorist Financing Ordinance, which took effect on June 1, 2023, the SFC has sought to close the gap in its licensing and supervision powers over VATPs.
“As a condition to allow SFC-licensed VATPs to serve retail investors under the new regime, the SFC has further imposed a number of stringent requirements including ensuring suitability in the onboarding process, enhanced token due diligence, admission criteria and disclosures,” the regulator said in its statement.
Newly-licensed VATPs are now subject to rigorous governance measures designed to protect industry participants.
The regulatory body is expected to collaborate with its subsidiary, the Investor and Financial Education Council, for a public campaign to further educate investors.
According to the statement on Sunday, both bodies will leverage mass media, social media, and educational talks to raise public awareness against potential VATP-related fraud.
The SFC and the police are also in talks to set up a dedicated channel for sharing information on suspicious VATP activities, the regulatory body said.
Don’t miss the next big story – join our free daily newsletter.
Source: https://blockworks.co/news/hong-kong-regulation-jpex