Hong Kong’s financial regulators have decided to retain the grace interval for crypto corporations no matter city grappling with principal fraud scandals involving crypto alternate platforms JPEX and Hounax in newest weeks, native media reported on Nov. 27.
The grace interval permits crypto corporations to proceed working in Hong Kong with no license until June 2024 as a option to allow ample time to regulate to new regulatory necessities launched earlier this yr.
Whatever the newest scams, the Securities and Futures Price (SFC) believes that abrupt modifications to the grace interval is perhaps counterproductive, doubtlessly destabilizing the burgeoning digital asset sector in Hong Kong.
SFC Director of the Licensing and Fintech Unit Wong Lok-hei said:
“Scams can happen with or with out the grace interval.”
Within the meantime, SFC CEO Leung Fung-yee echoed the sentiment and said merchants need to be cautious of schemes offering unrealistically extreme returns.
She added that platforms like Hounax won’t be regulated entities, and the SFC doesn’t have the flexibility to shut down their operations immediately.
Extreme-profile crypto scandals
All the number of investment-related fraud circumstances in Hong Kong from January to September was a staggering 4,331 — amounting to losses of spherical HK$2.82 billion.
The JPEX and Hounax circumstances, involving deceptive selling strategies and restrictions on withdrawals, have revealed necessary gaps throughout the regulatory oversight of digital belongings.
The Hong Kong police have simply these days escalated their actions in opposition to fraudulent actions throughout the crypto sphere, arresting 30 additional individuals linked to JPEX, bringing the complete number of arrests to 66.
No matter these arrests, no formal bills have been pressed, and the suspects have been launched on bail. The JPEX scandal has left 2,623 people victimized, with losses estimated at spherical HK$1.6 billion.
Within the meantime, authorities simply these days issued warnings in opposition to Hounax after 131 victims who collectively misplaced close to HK$120 million filed complaints in opposition to the platform. Primarily crucial single reported loss involved a 69-year-old lady who was defrauded of HK$12 million.
In response to these incidents, the Hong Kong Police have urged most people to be vigilant, significantly referring to unsolicited funding options on social media, suspicious cell apps, and unverified web pages. The SFC has moreover warned that platforms like Hounax are suspicious and have employed deceptive strategies to lure merchants.
Posted In: Hong Kong, Regulation
