The Hong Kong Securities and Futures Commission (SFC) has advised investors to exercise caution regarding JPEX, a cryptocurrency exchange operating without regulatory approval.
Hong Kong clamps down on JPEX
The SFC, in an announcement on Sept. 13, noted that none of the entities under the JPEX Group has obtained a license, nor has there been an application to operate a regulated virtual asset trading platform (VATP).
Instead, JPEX utilizes social media influencers, key opinion leaders (KOLs), and over-the-counter (OTC) crypto money changers to promote its products and services to customers in Hong Kong.
Furthermore, the regulator has outlined some concerning activities associated with JPEX and its promoters. These include a false statement on JPEX’s website, where it claims to be regulated by foreign regulatory agencies as a regulated VATP. Additionally, the company offers high annual yields for certain products, with rates as high as 21%.
The SFC has also received complaints from retail investors who reported difficulties in withdrawing their assets from the platform or observed changes and reductions in their investments.
Moreover, the SFC clarified that JPEX’s announcement of a business partnership with a Hong Kong-listed company was inaccurate, as the mentioned firm had already terminated the partnership and made no investments in the crypto exchange.
The SFC advises residents to be cautious when dealing with unregulated platforms, emphasizing that funds lost due to bankruptcy, hacks, or misappropriation may not be recovered.
The regulator also warns against overly optimistic investment returns and influencers providing investment advice on social media.
It notes that paid promoters may not always possess sufficient financial and investment expertise. Relevant influencers and OTC shops have been instructed to halt the promotion of JPEX and its offerings.
JPEX responds
In a separate blog post, JPEX responded to the SFC’s warning by mentioning that it had publicly announced its intention to seek a crypto trading license in Hong Kong back in February 2023.
At that time, the platform had plans to offer various services to Hong Kong users, including derivatives, spot trading, and staking, pending regulatory approval.
However, JPEX stated that it had not yet submitted the application due to ongoing preparations and document requirements.
The exchange also expressed concerns about the impact of the SFC’s statement on Hong Kong’s aspiration to become a web3 hub.
Additionally, it mentioned feeling undue pressure from the regulator’s actions.
Consequently, JPEX hinted at the possibility of withdrawing its license application in the region.
“The unfair suppression by the SFC has led us to consider withdrawing our license application in the Hong Kong region and adjust our future policy development accordingly. The SFC should also bear full responsibility for undermining the prospects of cryptocurrency development in Hong Kong.”
JPEX’s statement
