Crypto companies must register with Hong Kong's securities regulator. JPEX never submitted a license application, claims SFC.
The Securities and Futures Commission (SFC), Hong Kong's main financial authority, has issued a warning against the cryptocurrency exchange JPEX.
The SFC asserts that the platform exhibits "suspicious features" and lacks the essential licensing to function legally in Hong Kong, according to a South China Morning Post story.
In an effort to establish itself as a regional center for cryptocurrency, the territory just enacted a historic list of legislation. It requires a license for a virtual asset trading platform (VATP), among other legal criteria. However, the SFC claims that JPEX has not requested one.
JPEX released a statement informing the public that the company will need to change its operational procedures and corporate guidelines. The cryptocurrency exchange also announced it is creating a special task group to talk about future development paths and additional modifications, in addition to changing the withdrawal cost for USDT. The action appears to be intended to dissuade users from taking money out of the exchange.
In response to the SFC's warning, the company also released a statement outlining its goal and plans to seek a cryptocurrency trading license. JPEX was unable to give information about the progress of their application procedure, nevertheless.
The SFC also singled out internet celebrities and over-the-counter (OTC) virtual asset exchanges (shops) for spreading incorrect information about JPEX's application for a VATP license.
The statement cautioned, "Investors should be wary of their opinions," saying that some online superstars are paid for publicity and are not financial experts.
Wu Blockchain cites additional eyebrow-raising actions following the Hong Kong Securities and Futures Commission's public alert over "suspicious" activity by cryptocurrency exchange, JPEX.
Wu Blockchain claims that JPEX upped its withdrawal fees from the platform to as much as 980 USDT, and that in addition, the employees staffing the exchange's booth at 2049 Singapore "disappeared".
In addition, attendees of the Token 2049 event in Singapore stated that JPEX's exhibit had been left empty following the warning from the Hong Kong regulator.
For allowing the exchange to advertise itself as a sponsor of Token 2049, one of the major crypto events in the nation, some members of the community criticized the event.
It appears that PeckShield, a blockchain security company, has confirmed accusations that JPEX had raised its withdrawal cost to exorbitant amounts in later comments on X (Twitter).
While the specifics of JPEX's wrongdoings, if they are true, have not yet been revealed, recent actions by the exchange seem to reflect a very negative response to the Hong Kong SFC's warning.
Hong Kong's financial watchdog also referred to some of the platform's yield products, which offer yields on Bitcoin, Ethereum, and USDT as high as 21%, while cautioning investors against "investment opportunities that may seem too good to be true."
Hong Kong has been hard at work establishing a legal safe haven for the cryptocurrency sector, for both businesses and investors. In June, it permitted retail investors to trade digital assets, and it established a special Web3 task group to encourage the growth of the ecosystem.