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Hong Kong’s top financial watchdog, the Securities and Futures Commission (SFC) has issued a warning against crypto exchange JPEX.
According to a report in South China Morning Post, the SFC claims the platform showcases “suspicious features” and doesn’t have the necessary licensing to legally operate in Hong Kong.
The territory recently passed a landmark list of crypto regulations, bidding to become a crypto hub in the region. It demands, among other legal requirements, a virtual asset trading platform (VATP) license. But according to the SFC, JPEX hasn’t applied for one.
Earlier today, JPEX published a statement, announcing the company would have to make adjustments to their business practices and policies. Along with modifying the withdrawal fee for USDT, the crypto exchange also said it is establishing a special task force to discuss future development directions and further adjustments.
The company also issued a statement yesterday in reply to the SFC’s warning, indicating their intention and plans to apply for the crypto trading license. JPEX was unable, however, to provide details as to the status of their application process.
Yesterday’s notice from the regulator read: “No entity in the JPEX group is licensed by the SFC or has applied to the SFC for a license to operate a VATP in Hong Kong.”
The SFC also singled out online influencers and over-the-counter virtual asset money changers (OTC shops) as having falsely promoted that JPEX had applied for a VATP license.
“Investors should be wary of their opinions,” read the statement, claiming some internet celebrities are paid for publicity and are not investment professionals.
Warning investors of “investment opportunities that may seem too good to be true,” Hong Kong’s financial watchdog also pointed to some of the platform’s yield products which include returns on Bitcoin, Ethereum and USDT as high as 21%.
Hong Kong has been busy creating a regulatory safezone for the crypto industry—for both companies and investors. It approved digital asset trading for retail investors in June, and has set up a dedicated Web3 task force to promote the ecosystem’s development.