JPEX operating without approval, Hong Kong regulator warns
- None of the JPEX entities has secured a crypto license, claimed Hong Kong regulator SFC.
- JPEX has responded to the statement, questioning the SFC’s role in creating a crypto-friendly environment.
The Hong Kong Securities and Futures Commission (SFC) has cautioned investors about the crypto exchange JPEX, which was reportedly operating without regulatory approval.
As per the warning issued on 13 September, none of the entities under the JPEX Group have secured a license. Further, the exchange had not applied to run a regulated virtual asset trading platform (VATP).
The crypto exchange has been marketing its crypto products to customers in the region through social media influencers and over-the-counter (OTC) crypto money changers. Thus, SFC asked influencers and OTC shops to stop marketing JPEX and its offerings.
The regulators have also mentioned some concerning activities at JPEX. Notably, the exchange’s website mentioned an erroneous claim that it was being regulated by foreign regulatory agencies as a regulated VATP. For certain offerings, the exchange claimed to offer yearly yields as high as 21%.
The SFC further stated that JPEX’s statement of collaboration with a Hong Kong-based company was false.
The regulator has also received complaints from retail investors who have had difficulty withdrawing their assets from the platform or have seen changes and reductions in their investments. It advised customers to exercise caution when dealing with unregulated crypto exchanges.
Moreover, SFC emphasized that they may not be able to recover funds lost to bankruptcy, hacks, or misappropriation.
JPEX questions SFC’s intention to make Hong Kong a crypto-friendly destination
JPEX responded to the SFC’s statement via a blog post on 13 September. The exchange said it had publicly revealed its plan to secure a crypto trading license in Hong Kong in February 2023 itself. However, it had not yet submitted the application due to ongoing preparations and requirements.
The exchange questioned the SFC’s intention to create a crypto-friendly environment in Hong Kong.
The post read,
“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.”