Hong Kong JPEX scandal: city’s cryptocurrency power players applaud Web3 regulation, seek more investor education

A group of 10 crypto industry executives, including Animoca Brands’ Yat Siu, has published a public letter endorsing the government’s Web3 commitment

The executives say they have ‘taken notice of the situation at JPEX’, and requested the government to work with the Web3 industry on education efforts

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Cryptocurrency platform JPEX imploded last month after Hong Kong’s securities watchdog issued a public warning that accused the enterprise of offering “suspicious features” and spreading misleading claims about its licensing status. Photo: Bloomberg

Published: 6:00pm, 6 Oct 2023

Hong Kong’s cryptocurrency executives are applauding the government’s approach to regulating the virtual asset sector and are pushing for greater public education, as the city continues to deal with the fallout of an alleged fraud involving cryptocurrency platform JPEX that has resulted in HK$1.5 billion in losses.

The Hong Kong government has “taken the correct approach in its commitment to the future growth of Web3” by developing “clear and consistent regulation to govern the digital assets economy”, 10 cryptocurrency industry executives, including Animoca Brands co-founder Yat Siu, said in a joint statement published on Thursday.

They have “taken notice of the situation at JPEX”, and wish to express their “unambiguous support” for the government’s “strict and swift” enforcement actions towards firms that violate the city’s regulations, the letter reads.

The group includes executives from cryptocurrency exchange OSL and financial services platform Matrix Port, as well as Gary Liu, former CEO of the South China Morning Post and its non-fungible token (NFT) spin-off Artifact Labs.

Hong Kong police display seized cash, computer equipment, luxury handbags and promotional leaflets at a press conference on September 19, 2023, regarding the initial arrests of people with ties to cryptocurrency platform JPEX. Photo: Agence France-Presse

Hong Kong cryptocurrency trading platform JPEX has in recent years attracted a large number of retail investors by putting up advertisements in the city’s busiest locations, claiming to be a licensed exchange that offers yields as high as 20 per cent.

JPEX imploded last month after Hong Kong’s securities watchdog issued a public warning that accused the cryptocurrency platform of offering “suspicious features” and spreading misleading claims about its licensing status.