The Hong Kong Securities and Futures Fee (SFC) has suggested traders to train warning concerning JPEX, a cryptocurrency change working with out regulatory approval.
Hong Kong clamps down on JPEX
The SFC, in an announcement on Sept. 13, famous that not one of the entities beneath the JPEX Group has obtained a license, nor has there been an utility to function a regulated digital asset buying and selling platform (VATP).
As a substitute, JPEX makes use of social media influencers, key opinion leaders (KOLs), and over-the-counter (OTC) crypto cash changers to advertise its services to prospects in Hong Kong.
Moreover, the regulator has outlined some regarding actions related to JPEX and its promoters. These embody a false assertion on JPEX’s web site, the place it claims to be regulated by overseas regulatory companies as a regulated VATP. Moreover, the corporate affords excessive annual yields for sure merchandise, with charges as excessive as 21%.
The SFC has additionally acquired complaints from retail traders who reported difficulties in withdrawing their belongings from the platform or noticed adjustments and reductions of their investments.
Furthermore, the SFC clarified that JPEX’s announcement of a enterprise partnership with a Hong Kong-listed firm was inaccurate, because the talked about agency had already terminated the partnership and made no investments within the crypto change.
The SFC advises residents to be cautious when coping with unregulated platforms, emphasizing that funds misplaced resulting from chapter, hacks, or misappropriation is probably not recovered.
The regulator additionally warns towards overly optimistic funding returns and influencers offering funding recommendation on social media.
It notes that paid promoters might not all the time possess adequate monetary and funding experience. Related influencers and OTC outlets have been instructed to halt the promotion of JPEX and its choices.
In a separate blog post, JPEX responded to the SFC’s warning by mentioning that it had publicly introduced its intention to hunt a crypto buying and selling license in Hong Kong again in February 2023.
At the moment, the platform had plans to supply numerous companies to Hong Kong customers, together with derivatives, spot buying and selling, and staking, pending regulatory approval.
Nevertheless, JPEX said that it had not but submitted the applying resulting from ongoing preparations and doc necessities.
The change additionally expressed considerations concerning the impression of the SFC’s assertion on Hong Kong’s aspiration to turn out to be a web3 hub.
Moreover, it talked about feeling undue stress from the regulator’s actions.
Consequently, JPEX hinted at the potential of withdrawing its license utility within the area.
“The unfair suppression by the SFC has led us to think about withdrawing our license utility within the Hong Kong area and alter our future coverage growth accordingly. The SFC must also bear full duty for undermining the prospects of cryptocurrency growth in Hong Kong.”