New task force in Hong Kong set to monitor crypto exchanges

A newly established working group will closely monitor cryptocurrency exchanges in Hong Kong in the wake of the JPEX scandal.

Hong Kong’s security regulator and the police force have together launched the group to coordinate monitoring and investigating illegal activities related to virtual asset trading platforms (VATPs).

The working group was formally created following a meeting between the two agencies on Sept. 28, according to a statement released Wednesday. 

Members will include representatives from units including the Hong Kong Police Force’s Commercial Crime Bureau, Cyber Security and Technology Crime Bureau, as well as the Securities and Futures Commission’s enforcement division and intermediaries division.

The primary goals of this group include exchange of information regarding potentially illicit activities and violations within VATPs. 

Additionally, the group aims to establish a mechanism for evaluating risks associated with suspicious VATPs and improving cooperation in investigative efforts.

“The implementation of the new platform between the police and the SFC is instrumental to fast-tracking of vital intelligence exchange and joint collaboration in responses to the challenges arising from VATPs, so as to better protect the general public of Hong Kong,” Eve Chung, Assistant Commissioner of Police (Crime), said in a statement.

Last month, Hong Kong’s Securities and Futures Commission unveiled initiatives aimed at improving investor education and the distribution of information regarding VATPs. 

The action came in response to a major crypto scandal in Hong Kong that affected over 2,000 individuals. 

These measures were introduced as part of the regulator’s investigation into JPEX, a crypto trading platform linked to what is being referred to as one of the largest fraud cases in the country.

At the end of September, there were nearly 2,400 victims who incurred losses exceeding HK$1.5 billion ($191 million). 

Before the JPEX scandal came to light, the SFC had cautioned investors about unlicensed cryptocurrency platforms involved in “improper practices.”

The agency also expressed concerns that some VATPs claiming to have applied for licenses might not be adhering to legal and regulatory requirements of the new regime.

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