The Hong Kong Securities and Futures Commission (SFC) has issued a stern warning against the use of the crypto exchange known as JPEX. The commission has accused the platform of exhibiting “suspicious features” and promoting misleading information about its licensing status.
The SFC has also denied that JPEX is regulated.
SFC Issues Warning Against JPEX
According to a report by SCMP, the SFC expressed concerns about false and misleading statements being propagated 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 licensed by the regulator or has applied for a license to operate a VATP in Hong Kong.
Investors have been urged to exercise caution when encountering investment opportunities that appear “too good to be true.” The SFC further emphasized that investment advice, especially on social media platforms, is frequently provided by paid promoters who may not possess the expertise of investment professionals.
The regulatory agency has taken proactive steps to address this issue, notifying relevant influencers, opinion leaders, and OTC shops to stop promoting JPEX and its related services and products.
JPEX’s own website has claimed that the platform is “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 to the SFC’s claims, JPEX, on the other hand, maintained its intention to apply for a license, asserting,
“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 SFC expressed additional concerns about JPEX, including promises of exceptionally high returns, reports of investors encountering difficulties with asset withdrawals, and false claims about the exchange’s partnership with and investment from a Hong Kong-listed company.
SFC Increases Scrutiny
The SFC’s warning is part of a broader effort to regulate the rapid surge in digital assets activities within the city-state. Crypto-related scams in Hong Kong reportedly doubled to approximately $217 million last year despite the bear market.
Earlier this year, the regulator initiated its VATP regulatory framework, ordering that exchanges offering services to retail customers must apply for and secure approval within a one-year grace period.
The agency has directed investors to verify licensed exchanges from its official list, which currently includes HashKey and OSL. Both of these entities previously participated in a voluntary licensing scheme and recently received license upgrades to serve retail investors.
Under Hong Kong’s Anti-Money Laundering and Counter-Terrorist Financing Ordinance, which implemented the VATP licensing scheme, virtual asset fraud could result in fines of up to $1.3 million and imprisonment for up to 10 years.