Hong Kong’s monetary regulators have determined to retain the grace interval for crypto companies regardless of the town grappling with main fraud scandals involving crypto trade platforms JPEX and Hounax in latest weeks, native media reported on Nov. 27.
The grace interval permits crypto companies to proceed working in Hong Kong and not using a license till June 2024 as a way to enable ample time to adjust to new regulatory requirements launched earlier this yr.
Regardless of the latest scams, the Securities and Futures Fee (SFC) believes that abrupt adjustments to the grace interval could possibly be counterproductive, probably destabilizing the burgeoning digital asset sector in Hong Kong.
SFC Director of the Licensing and Fintech Unit Wong Lok-hei mentioned:
“Scams can occur with or with out the grace interval.”
In the meantime, SFC CEO Leung Fung-yee echoed the sentiment and mentioned traders have to be cautious of schemes providing unrealistically excessive returns.
She added that platforms like Hounax usually are not regulated entities, and the SFC doesn’t have the facility to close down their operations instantly.
Excessive-profile crypto scandals
The overall variety of investment-related fraud circumstances in Hong Kong from January to September was a staggering 4,331 — amounting to losses of round HK$2.82 billion.
The JPEX and Hounax circumstances, involving misleading promoting techniques and restrictions on withdrawals, have revealed vital gaps within the regulatory oversight of digital property.
The Hong Kong police have not too long ago escalated their actions in opposition to fraudulent actions within the crypto sphere, arresting 30 extra people linked to JPEX, bringing the full variety of arrests to 66.
Regardless of these arrests, no formal prices have been pressed, and the suspects have been launched on bail. The JPEX scandal has left 2,623 individuals victimized, with losses estimated at round HK$1.6 billion.
In the meantime, authorities not too long ago issued warnings in opposition to Hounax after 131 victims who collectively misplaced near HK$120 million filed complaints in opposition to the platform. Essentially the most vital single reported loss concerned a 69-year-old lady who was defrauded of HK$12 million.
In response to those incidents, the Hong Kong Police have suggested the general public to be vigilant, particularly concerning unsolicited funding alternatives on social media, suspicious cell apps, and unverified web sites. The SFC has additionally warned that platforms like Hounax are suspicious and have employed misleading techniques to lure traders.