In the latest move that brings transparency to the murky world of cryptocurrencies, Hong Kong’s financial authority, the Securities and Futures Commission (SFC), declared intentions to publish a list of cryptocurrency trading companies that have applied for operational licenses. This decision follows in the aftermath of the JPEX scandal. The SFC plans to disclose the identity of these firms in response to public demand, according to Julia Leung Fung-yee, SFC CEO.
However, businesses applying for licensure, the SFC cautioned, does not guarantee conformance to all its rules. This eye-opening announcement comes on the heel of a massive financial scam in the region. Unlicensed cryptocurrency exchange, JPEX, is being investigated for fraud, reportedly causing a loss of over $182 million to more than 1,600 investors. This sobering incident is seen as a setback to the government’s ongoing efforts to elevate its global crypto status.
Official records show that only two digital asset trading platforms, OSL Digital Securities Limited and Hash Blockchain Limited, have obtained necessary SFC licensing as of August 2023. Conversely, multiple companies, including HKVAX, HKBitEx, Hong Kong BGE Limited, and Victory Securities, have applied for the said licenses.
The unassuming public discovered JPEX’s operations sans a license on September 13. In a public statement, the SFC sternly emphasized the importance of investor education. It insisted that SFC-licensed virtual asset trading platforms (VATPs) are under strict governance measures. These measures include the safe custody of assets and prevention of market manipulation tactics, among others, that ensure investor safety.
The SFC plans to impose stringent requirements. These include the need for a suitable onboarding process, detailed token due diligence, admission criteria, and stringent disclosures to permit SFC-licensed VATPs to cater to retail investors. To highlight and identify unregistered or unregulated cryptocurrency businesses, the SFC announced its plans to list “suspicious VATPs” guilty of potential law violations.
Additionally, SFC plans to collaborate with the Investor and Financial Education Council (IFEC) to launch a public campaign aimed at spreading awareness of scams and fraud in the crypto market. This campaign’s primary agenda is undoubtedly to enhance investor awareness using multiple communication channels. The authority hopes this initiative will equip the public with the essential understanding of associated risks and potential fraud in virtual asset trading.
Source: Cryptonews
