On September 19, Hong Kong Chief Executive John Lee Ka-Chiu announced that the government would intensify its efforts to educate and remind investors to exclusively use platforms holding Securities and Futures Commission (SFC) licenses, Associated Press said in a report.
The JPEX issue gained prominence on September 13 when the SFC alerted the public to over 1,000 complaints concerning the unregistered crypto exchange, with reported losses totaling more than 1 billion Hong Kong dollars ($128 million).
In its warning, the SFC highlighted that JPEX had promoted its services and products to the Hong Kong public through online celebrities and over-the-counter money changers.
As the issues surrounding JPEX became public, numerous platform users faced difficulties withdrawing their funds, while others voiced concerns about reduced wallet balances. In response to the Hong Kong watchdog’s warning, the platform allegedly raised its withdrawal fee to $1,000 in an attempt to dissuade users from withdrawing their assets.
The crypto exchange later attributed the ongoing liquidity crisis to third-party market makers, resulting in the increased withdrawal fee. Additionally, Hong Kong police arrested influencer Joseph Lam (Lin Zuo) due to his association with JPEX.
Despite positioning itself as a growing crypto hub in 2023 with crypto-friendly legislation and opening up the crypto trading market to retail customers, Hong Kong has witnessed the proliferation of unlicensed crypto platforms like JPEX. This has led to many users falling victim to these platforms due to a lack of knowledge and awareness.
To address this issue, the regulatory body is now actively working on educating the public about the importance of using only licensed platforms for their cryptocurrency trading activities.
