Hong Kong investigates JPEX crypto platform, city leader says fraud allegations show need for regulation
The alleged HK$1.3 billion (US$166 million) fraud centred on the JPEX cryptocurrency platform has underscored the importance of a regulatory framework for virtual assets, Hong Kong’s leader has said, while the operator remains defiant, debuting a new dividend plan for investors.Chief Executive John Lee on Thursday (Sep 21) said he was highly concerned about the case, adding that the financial services sector had an important role in explaining new products to customers.“This incident shows the importance of investing in licensed and regulated virtual asset platforms.
Otherwise, it will be difficult for investors to be protected,” Lee told a banquet held by the financial sector to mark National Day on Oct 1.He said government policy aimed to protect investors with an effective regulatory regime, release public and transparent information and promote investor education.But in a strongly worded statement on Thursday, Dubai-headquartered JPEX hit back at the market regulator, the Securities and Futures Commission (SFC), after launching a new dividend scheme for investors the previous evening.It said its team had never had a fixed work location with members in various regions worldwide, as it saw the structure of physical companies as an obstacle to the global promotion of cryptocurrencies.JPEX added that while it announced in June it would expand its team, the regulator had subjected it to a series of “unfair suppressive actions”.“The SFC has dealt with our platform with vague guidelines and trumped-up charges, even instructing telecom providers to directly block our platform, disregarding our wish to have rational consultations and communications with the SFC,” it said.“Such unfair bureaucratic practices have strengthened our determination to pursue the path of a decentralised autonomous organisation (DAO)".JPEX also insisted its practice of issuing its own digital token was in line with other established virtual asset exchanges such as Binance and Huobi.In a later
