Hong Kong’s Chief Executive Calls for Tighter Crypto Regulations Citing JPEX Saga

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Jai Pratap

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Jai Pratap

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Jai serves as the Asia Desk Editor for Cryptonews.com, where he leads a diverse team of international reporters. Jai has over five years of experience covering the web3 industry.

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Last updated:

September 19, 2023 01:46 EDT

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Hong Kong’s Chief Executive John Lee called for tighter regulations on crypto trading citing the recent alleged rugpull by the unlicensed crypto exchange JPEX.

Addressing a press conference, John Lee said that the JPEX saga highlights the need for tighter crypto regulations. 

The city-state’s chief executive said that the administration will set up efforts to educate investors and urge them to only use licensed platforms that are regulated by the Securities and Futures Commission. 

Hong Kong Police Arrest Six Individuals in JPEX Probe

Earlier, Hong Kong authorities revealed that they have arrested six individuals, including two social media influencers in relation with an investigation into the unlicensed crypto exchange JPEX. 

As per the authorities, over 1,400 people have filed complaints to the police about the JPEX exchange, involving around HK$1 billion, approximately $127 million, in losses.

Officers said the six suspects, four men and two women, were held on suspicion of conspiracy to defraud, and more arrests could be made as their investigation into the exchange continues.

One of the arrested individuals is a famous social media influencer and a formal lawyer Cham Lok. 

He was arrested at his office on Monday as police seized suspected evidence and an undisclosed amount of cash. 

JPEX Claims Unfair Treatment by Relevant Institutions

The troubled crypto exchange announced to suspend trading in a blog post on Monday saying that their partnered third-party market makers have maliciously frozen funds. 

The exchange cited unfair treatment by relevant institutions in Hong Kong towards JPEX and a series of negative news as a reason. 

The exchange further noted that their partners are now demanding more information from the platform for negotiation, restricting their liquidity and significantly increasing daily operating costs, leading to operational difficulties.

Currently operating without a license in Hong Kong, JPEX claims to be licensed by securities authorities in Australia and is registered with the U.S. Financial Crimes Enforcement Network (FinCEN) as a Money Services Business (MSB).