Hong Kong’s Securities and Futures Commission (SFC) is teaming up with the police force to integrate efforts towards monitoring illegal exchange activities. The joint task force has become necessary following the JPEX incident, where it ran crypto-related services without compliance with the regulatory requirements.
Integrated Working Group to Wrestle Crypto-Related Fraud
The SFC indicated in a Wednesday, October 4 statement that the integrated efforts will expedite the monitoring of suspicious activity on the cryptocurrency exchanges. The joint task force is the outcome of the high-level meeting between the securities regulator (SFC) and the police force. Its primary purpose is to guarantee collaboration to monitor and weed out illegal activities within the Virtual Asset Trading Platforms (VATPs).
The task force draws membership from the cyber security unit handling financial intelligence jointly with commercial crime and investigations. The task force will feature representatives from the SFC’s enforcement and intermediaries unit.
The working group aims to ease information sharing regarding suspicious and illegal activities perpetrated on the VATPs. Also, the working group collaborates and integrates the constituent agencies’ activities when executing related investigations.
Hong Kong Authorities Implement Enforcement Action Against Illicit Crypto-Related Activities
The establishment of the Hong Kong Task Force coincides with a period when the administrative region resolves the wrangles caused by JPEX. The incident alleged fraud orchestrated by the Dubai-based crypto exchange that has run operations without the requisite licensure.
The fraud incident at JPEX has seen the victims’ list surge to over 2300. The reports conveyed by the Hong Kong authorities indicate that the victims collectively lost HK$1.43 billion, translating to $182.9 million. The JPEX incident is among the most significant financial frauds ever orchestrated in Hong Kong.
The working group comes weeks after the SFC, in a September 25 update, unveiled new measures. The new mechanism targets enhancing security and transparency within the vibrant cryptocurrency space.
Hong Kong welcomes multiple measures to seal the loopholes exploited by fraudsters. The SFC outlined licensing and closing down. Besides that, SFC introduced the deemed-licensed application that is pending VATPs approval.
The proactive stance adopted by Hong Kong coincides with the city witnessing a surge in crypto-related activities. A Monday, October 2 publication by Chainalysis acknowledged that the inflows to the administrative region rivaled mainland China. The blockchain data firm Chainalysis lauded the impressive accomplishment by Hong Kong despite only hosting 0.5% of China’s population.
Chainalysis revisited the 2021 move by China to impose a sweeping crackdown targeting all crypto-related trading and mining activities. The report noted that the welcoming stance adopted by Hong Kong may prompt the policymakers in mainland China to embrace a softer approach.
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