HONG KONG (AP) — Hong Kong’s chief stated Tuesday that the territory will tighten regulation of digital property after police arrested six folks following allegations of fraud at an unlicensed cryptocurrency alternate within the metropolis.
The arrests on Monday adopted an announcement by Hong Kong’s securities watchdog final week that the alternate, JPEX, was unlicensed and didn’t have authority to function its cryptocurrency buying and selling platform within the metropolis. The Securities and Futures Fee stated it had acquired greater than 1,400 complaints in opposition to JPEX involving greater than 1 billion Hong Kong {dollars} ($127.9 million) in losses.
The SFC additionally stated some buyers stated complained of being unable to withdraw their digital property from JPEX accounts or of discovering their balances have been “decreased and altered.”
The SFC and police have been anticipated to launch particulars on the case later Tuesday.
Hong Kong’s chief govt, John Lee, informed reporters Tuesday that the federal government would step up efforts to teach buyers and remind them to make use of solely platforms licensed by SFC.
JPEX introduced Monday that it was suspending buying and selling on its platform. It stated in a press release that it was “negotiating with … third-party market makers to resolve the liquidity scarcity.”
In a press release Sunday, JPEX complained of “unfair remedy by related establishments” in Hong Kong. It accused an unnamed partnered third-party market maker of “maliciously” freezing funds.
In China, cryptocurrency transactions have been banned since 2021 and transactions made on international exchanges from throughout the nation are additionally thought-about unlawful. Within the wake of the ban, Chinese language cryptocurrency corporations have turned to Hong Kong as a base.
Hong Kong’s SFC started accepting purposes for cryptocurrency exchanges from June 1, permitting licensed operators to serve retail buyers so long as they perceive the dangers concerned. Beforehand, solely skilled buyers may entry such exchanges.
Solely two such exchanges have acquired approval in Hong Kong — OSL Trade and Hashkey Trade.