Nearly four months after Hong Kong’s Securities and Futures Commission (SFC) began accepting applications for cryptocurrency trading platform licenses, the city’s financial watchdog has decided to disclose the list of all legit applicants. The move comes after police arrested at least eight people following allegations of fraud at unlicensed cryptocurrency trading platform JPEX—that impacted more than 1,600 investors and about $152 million in assets.
According to a statement by the SFC, the agency will release a list of licensed virtual asset trading platforms (VATPs), along with a list of closing-down VATPs, and a list of VATPs adjudged licensed as of June 1, 2024, and a list of VATP applicants. The point to emphasize is that the decision has been taken “in light of public demand.”
“To help the public more easily identify suspicious VATPs doing business in Hong Kong and enhance awareness, the SFC will enhance and issue a dedicated list of suspicious VATPs which is easily accessible and with prominence on the SFC’s website,” said the SFC.
The remarks come amid allegations that Dubai-based crypto exchange JPEX was involved in illegal crypto activity. Hong Kong police launched an investigation into JPEX—after the SFC warned that the platform had been “misleading investors” about having applied for VATP license in Hong Kong.
Last week, Hong Kong police raided 20 locations linked to JPEX operations—and arrested at least 8 people as part of their mission called “tieguan” or “iron gate”. Additionally, the city’s police have frozen assets to the tune of 15 million Hong Kong dollars lying in the bank accounts of arrested suspects, along with their properties worth 44 million Hong Kong dollars.
Speaking at a press conference, Elizabeth Wong, Director of Licensing and Head of Fintech Unit, Intermediaries of the SFC, stressed the need for transparency, saying that the disclosure of crypto license applicants will help the public filter out suspicious VATPs. She also noted that four companies are in the preliminary stages of applying for licenses.
“It is very encouraging that Hong Kong is ready to take enforcement action on unlicensed and criminal activities, and it is likewise very positive to see that also those individuals who have coerced often uninformed investors to trade on JPEX, so-called ‘KOLs’ and ‘influencers,’ are held liable for their actions,” said Donald Day, chief operating officer of Hong Kong-based crypto platform VDX.
While China has taken tough measures on cryptocurrency trading and mining, Hong Kong has rolled out a welcome mat for crypto firms in a bid to bolster its status as a financial hub. In fact, it has been encouraging banks to work with them. However, the controversy surrounding FTEX has shaken investor confidence. The silver lining, if there is one, is Hong Kong regulators doubling down on transparency—and not shying away from taking swift action against suspicious crypto firms. Recently, Hong Kong authorities alerted citizens that some crypto firms were falsely describing themselves as “banks.”
