Hong Kong Tightens Crypto Regulation Because Of JPEX
Once positioned as a cryptocurrency hub, Hong Kong is tightening regulation amid the JPEX exchange investigation scandal.
Last week, local police received 1,400 complaints from JPEX users about fraud, freezing of funds and balance emptying. Today, that number has increased to 1,641. Law enforcement arrested six people and froze $1.92 million in assets. Police are also considering seizing $7.6 million in illegally obtained funds.
Users started complaining that they could not withdraw funds. According to some reports, the total amount of blocked funds is 152 million dollars.
The situation unfolding around JPEX's activities has raised concerns among local regulators. In a statement, SFC head John Lee Ka-Chiu confirmed the government's intentions to inform the public about the risks of using crypto platforms and the need to use licensed ones.
Unfortunately, the JPEX epic is unfolding according to the scenario already familiar to the crypto community. Liquidity crisis, freezing of users' funds, reduction of clients' wallet balances, arrests of persons associated with the exchange, shifting of responsibility. Time will tell whether JPEX will become the "Asian FTX" and how the investigation will unfold.