Hong Kong regulators designate JPEX exchange as unregulated with numerous suspicious activities

The overseas exchange JPEX, which had previously sponsored the "Box Up" event in Taiwan and was heavily promoted by specific cryptocurrency media, has once again been warned by the Securities and Futures Commission (SFC) in Hong Kong. The SFC stated that "JPEX" is an unregulated virtual asset trading platform actively promoting products illegally in Hong Kong, and has many suspicious activities.

Hong Kong Regulator Identifies JPEX as Unlawful in Hong Kong

The Securities and Futures Commission (SFC) of Hong Kong has noted a virtual asset trading platform named "JPEX" actively promoting its services and products to the Hong Kong public through social media influencers and over-the-counter (OTC) dealers.

The SFC sternly stated that none of the entities under the JPEX Group have been licensed by the SFC, nor have they applied for a license to operate a virtual asset trading platform in Hong Kong.

The SFC had already included JPEX in its list of unlicensed companies and suspicious websites in July 2022.

Hong Kong Regulator: JPEX Claims Registration in Dubai, Yet Unverifiable

The various overseas registration credentials used by JPEX for promotion, as indicated by the SFC, do not imply approval by overseas regulatory authorities. Note: This tactic is also used by many unregulated exchanges to confuse users.

The SFC stated, "Although JPEX has registered as a corporation or entity with several overseas regulatory bodies, these registrations do not constitute approval or licensing for it to provide virtual asset trading services legally within those jurisdictions."

The SFC even revealed that JPEX's so-called "Dubai license" was a deceptive claim.

The SFC said, "JPEX claims on its website that its operational headquarters are located in Dubai and are regulated by the Dubai Virtual Assets Regulatory Authority, and that their trading system 'adheres to strict regulatory standards and offers more transparency in cross-border transactions.' However, JPEX is not listed on the public list of licensed virtual asset service providers issued by the Dubai Virtual Assets Regulatory Authority."

Hong Kong Regulator: Numerous Suspicious Aspects of JPEX Exist

The SFC stated that there are numerous suspicious aspects in the methods used by JPEX and individuals promoting JPEX to the Hong Kong public. These include:

• Claims of licenses and qualifications that do not match the actual situation
• Offering unreasonable returns, with annualized rates for ETH, BTC, and USDT exceeding 19%
• Complaints from retail investors about being unable to withdraw funds or having balances altered
• JPEX claimed to have entered into a business partnership with a Hong Kong-listed company and received investments, which is untrue
• JPEX claimed to have applied for a license to operate a virtual asset trading platform in Hong Kong, which is untrue

The SFC has notified relevant influencers to cease promoting JPEX and its related services and products.

Hong Kong Regulator: Will Enforce Strictly, Maximum Penalty of Ten Years' Imprisonment

The SFC stated that anyone, including individuals and entities involved in such violations, who fail to comply with the SFC's regulatory framework for virtual asset trading platforms will be subject to enforcement actions without hesitation.

Acts involving money laundering and terrorist financing may incur fines of up to HK$10,000,000 and imprisonment for ten years under the Anti-Money Laundering Ordinance.

Hong Kong Cracks Down while Taiwan Media Promotes JPEX Vigorously

Compared to the enforcement stance of the SFC, Taiwan's Financial Supervisory Commission currently only issues warnings to the public regarding the degree of self-risk in high-risk overseas platforms. There is no actual enforcement against individuals involved in promotion and OTC exchanges. Therefore, certain media outlets in Taiwan are heavily advertising JPEX to earn profits. JPEX has also established a "Blockchain Tower" in Taiwan for various online and offline promotions. While Hong Kong is cracking down, Taiwan is embracing this new exchange.

The guidance principles that the Taiwan Financial Supervisory Commission will announce at the end of September will determine whether they can effectively protect Taiwanese investors, pending the attitudes of the commission and industry associations.

Interpreting the draft guidance principles of the Taiwan Financial Supervisory Commission, will overseas entities no longer be allowed to advertise?