The Secretary for Financial Services and the Treasury explained why the unregulated crypto exchanges may not be safe for crypto traders, following the fraud reports by the JPEX, an unregulated crypto exchange.
Hong Kong is a special administrative region of China. In China, crypto-related activities are fully prohibited but in Hong Kong people are free to invest in cryptocurrencies via regulated crypto platforms. In June of this year, the Hong Kong government introduced a new framework for the crypto sector, so that all the crypto companies can register with the financial regulator to ensure safe crypto trading services for the citizens.
On 6 Oct 2023, The Hong Kong Secretary for Financial Services and the Treasury, Hui Ching-yu, talked about the stablecoin regulation and JPEX crypto exchange fraud.
Ching-yu said that there are no laws for stablecoin trading for retail investors and no laws will come this year for stablecoin but in 2024 the government will introduce its precise rule for this particular sector of this innovative market
He also confirmed that crypto companies are required to secure regulatory approval to provide the trading of new cryptocurrencies, except Bitcoin & Ethereum.
The government official also addressed the JPEX crypto exchange fraud. He said that the JPEX crypto exchange was unregulated and was providing services with lack of security measures.
Ching-yu explained that JPEX fraud is proof that crypto companies should be regulated & people prefer to use only those crypto exchanges that are regulated by the Hong Kong financial regulator.
In the middle of the last month, the JPEX crypto exchange faced a small regulatory heat, as the Hong Kong financial regulator issued a public statement against the exchange & stated that the exchange was never regulated with the financial regulator and also ordered to wind down the services.
Following the government’s public announcement against JPEX, the majority of the big players dragged their funds from JPEX crypto. Following the liquidity crisis, JPEX proposed a scheme to give refunds to the customers in the next 2 years.