Hong Kong’s SFC issues a warning against JPEX crypto exchange for alleged suspicious features, misleading licensing claims, and heightened concerns, as it steps up efforts to combat cryptocurrency scams in the region.
- Hong Kong’s SFC warns against JPEX crypto exchange for suspicious features and false licensing claims.
- Investors cautioned about “too good to be true” opportunities and social media advice.
- SFC takes steps to stop JPEX promotion by influencers and OTC shops.
- JPEX plans to apply for a license but faces concerns like high returns, withdrawal issues, and false claims amid SFC’s increased crypto scam scrutiny in Hong Kong.
The commission has accused JPEX of exhibiting “suspicious features” and promoting misleading information about its licensing status.
It has clarified that JPEX is not regulated and has not applied for a license to operate a virtual asset trading platform in Hong Kong.
Another scam exchange causing thousands of victims losing their savings. 😔
JPEX is a small crypto exchange in Hong Kong that’s been offering nearly 30% APY on stablecoin staking.
— Leon.sol (@leon_only1) September 14, 2023
Caution Urged for Investors
The SFC has urged investors to exercise caution when encountering investment opportunities that seem “too good to be true.”
It highlighted the prevalence of investment advice on social media platforms by paid promoters who may not possess the expertise of investment professionals.
To address this issue, the SFC has taken proactive steps by notifying influencers, opinion leaders, and over-the-counter (OTC) shops to stop promoting JPEX and its services.
The SFC has deemed JPEX’s claim of being “licensed and recognized” to facilitate virtual asset trading as false.
Response from JPEX
In response to the SFC’s claims, JPEX has maintained its intention to apply for a license.
It asserts that it complies with regulations and licensing systems in different regions and aims to create an ideal Web 3.0 community.
The SFC expressed further concerns about JPEX, including promises of exceptionally high returns, difficulties faced by investors with asset withdrawals, and false claims about the exchange’s partnership with a Hong Kong-listed company and investment from the same.
Rising Crypto Scams in Hong Kong
The SFC’s warning against JPEX is part of its broader effort to regulate the surge in digital assets activities in Hong Kong.
Despite the bear market, cryptocurrency scams in the city reportedly doubled to around $217 million last year.
Earlier this year, the SFC initiated its VATP regulatory framework, requiring exchanges offering services to retail customers to apply for and secure approval within a one-year grace period.
The SFC has directed investors to verify licensed exchanges from its official list, which currently includes HashKey and OSL.
These entities have 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, virtual asset fraud could result in fines of up to $1.3 million and imprisonment for up to 10 years.
In conclusion, the SFC has issued a warning against JPEX for promoting false information and misleading statements about its licensing status.
The commission has advised investors to be cautious and has taken proactive steps to address the issue.
The SFC’s increased scrutiny is part of its efforts to regulate digital assets activities in Hong Kong and combat cryptocurrency scams. Investors are urged to verify licensed exchanges from the SFC’s official list to ensure compliance and prevent fraud.