The virtual asset trading platform JPEX has been involved in illegal operations, and 11 people have been arrested so far, which has raised public attention to the security of the virtual trading platform. At present, there are two virtual asset trading platform companies in Hong Kong that have been licensed, one of which is a licensed platform, OSL Executive Director and Head of Regulatory Affairs, Diao Ka Chun, said today (21 December) that it takes much longer to apply for a license for a virtual platform than that of traditional brokers, and his company has taken more than two years, but said that he agrees with the concept of Hong Kong's licensing framework, believes that investors can be better protected, and investors know how to recover in the event of an accident.
Diao Jiajun reminded investors that if someone uses "zero risk and high return" as a solicitation, they should immediately "light up" and pay attention to some investment platforms that can open accounts without review: "If the platform does not need to know that you are tied to the edge, you will not know that you are tied to the edge."
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Diao Jiajun, executive director and head of regulatory affairs at OSL, said in a commercial TV program this morning that the licensing process of the virtual platform is the same as the general licensing process, but it takes much longer than that of traditional brokers, and his company has taken more than two years to apply for a license, because the digital asset platform field is relatively new, different from the traditional model, and the market needs more time to review.
Mr Diao said that he agreed with the SFC's approach and agreed with the Hong Kong licensing framework order, believing that the JPEX incident is a good indication of the imperfection of the local legal system, as the regulatory digital asset sector is still developing, which may give investors the illusion that its regulatory and registered licensing regime may be the same as the traditional market protection, while Hong Kong's more prudent approach can give investors better protection.
Diao Jiajun said that customers pay more attention to convenience and user experience, but the account opening review must follow the statutory requirements and regulatory requirements, and it will not be much different from bank or securities account opening, insurance policy signing, etc., digital assets must also be guaranteed, such as appropriate technology review, etc., which is already a business rule. He reminded investors that if there is a platform that says that you can open an account without review, buy immediately and be vigilant: "If the platform does not need to know that you are tied to the edge, you will not know that you are tied to the edge."
In February 2022, cryptocurrency platform JPEX sold advertising in Hong Kong. （Anthony Kwan / Getty Images）
Diao also reminded investors that whether it is digital platforms or traditional investment, there is never absolutely safe or completely risk-free investment activities, and when someone refers to "zero risk and high return", they should immediately "light up". He pointed out that investment is not absolutely safe, even if you buy insurance, deposits, etc., because there have been insurance companies and banks that have failed in the past 10 to 20 years, and investment platforms are also risky.
He pointed out that the licensing system can give an objective bottom line, because the licensed platform, as a securities firm and platform, needs to submit monthly reports to the SFC to ensure financial transparency, and the liquidity and capital funds reach the statutory level, and its responsible person must also pass an in-depth background check.
Diao said that in the past, overseas platforms have gone bankrupt or there have been disputes, and Hong Kong investors may have no way to recover them, or it is more expensive or impossible to seek legal advice overseas.
Asked whether he supported the disclosure of the list in the application, Diao said that he did not agree with the approach, as investors have a low level of understanding of market conditions, and the presence of many different lists will create a misleading space for the impression that the application is safe and secure. He pointed out that the UK and Singapore will publish some lists of known illegal operations, and the Hong Kong Securities and Futures Commission has also begun to do so, believing that such practices can give investors multiple opportunities to verify risks and measure assessments.
JPEX|News: Police instruct telecommunications companies to block JPEX App and website Some did not follow JPEX|Advertisements spread throughout vehicles and building facades MTR reminds advertising agencies to strengthen supervision of JPEX case|Scholar: The incident reflects the government's need to strengthen supervision to urge active inspection of the virtual trading platform JPEX case|Police detain 3 more men A total of 11 people were arrested More than 2000,13 victims reported the JPEX case involving 1000.100 billion yuan|Lin Zuo doubtfully surrendered the lease to clear the office of Sky Ring Entertainment Company and removed "Lin Zuo Speculation" Signboard JPEX|Claim to continue to operate on the same day to revoke Australian company registration Statement assets less than A$<>,<>JPEX case|KOL Chen Yi filmed a film about detention and said bail of <> million yuan reiterated position unchangedJPEX case│JPEX said that it sought guidance from the SFC last year, but did not receive a positive response, malicious targeting