JPEX was suspected of fraud, and the incident was triggered by the CSRC's name warning, saying that JPEX falsely claimed that it was applying for a license. The SFC said at a press conference that it would not disclose the list of applicants who were applying for a "virtual asset service provider license" on the grounds that "shocked" citizens would "mistakenly" believe that these platforms were trustworthy.
According to the statistics of the reporter of "Hong Kong 01", at least 15 cryptocurrency trading platforms, or listed companies and securities companies in the market, announced that they were "applying", "intending to apply", "planning to apply", "starting the prelude", "officially attacking", and "expected to obtain a license in a certain month and year". The reporter asked the CSRC one by one whether these claims were accurate and whether they were being applied. The SFC refused to confirm whether the claims of these platforms were true, nor did it refuse to make public the list and written responses, saying only verbally that there was no response.
Cryptocurrency Investigative Report・Page|JPEX involved in fraud Lin Zuo, Chen Yi and other currency circle Internet celebrities were arrested
Some cryptocurrency exchange shops (OTCs) in Hong Kong can exchange different cryptocurrencies for cash, regardless of trading platform, but some advertise that JPEX has discounts. The picture shows a money change shop in Mong Kok. (Profile photo / Photo by Au Ka Lok)
The SFC's dismissal of the application as misleading JPEX that it will, intentionally, and with a plan
On September 9, the SFC named JPEX for six crimes, including false or misleading statements through influencer KOLs and over-the-counter money changers (OTCs) that "JPEX has independently or jointly applied for a virtual asset trading platform license in Hong Kong with a Hong Kong listed company", but in fact JPEX never submitted an application.
JPEX retorted that night, saying that the announcement on February 2 this year was that it "will" apply for a license in Hong Kong, and it is an "intentional" and "planned" application.
Hong Kong introduced a licensing regime for virtual asset trading platforms, which came into effect on 2023 June 6 with a one-year "transitional arrangement". (SFC)
There is a one-year transition period for the licensing system, and the public does not know who can make the transition
Hong Kong introduced the "Virtual Asset Trading Platform" licensing system, which came into effect on 6 June this year, and there is a one-year "transitional arrangement", and only platforms that "operate real business in Hong Kong and have real business bases" before June this year can continue to participate in the transitional arrangement until the end of May next year, otherwise it is illegal; During the transitional arrangement, there will be 1 months for the original platform to submit applications; If you do not intend to apply for a licence, you should gradually close your business during a 6-month transition period.
▼On September 9, the police and the China Securities Regulatory Commission explained the JPEX case▼
At the press conference, it was stated that the list would not be made public
Five days later, on September 9 (Monday), the police launched an arrest operation to arrest Lin Zuo, Chen Yi, JPEX employees and others, and it was not until Tuesday the 18th (Tuesday) that the police and the CSRC held a press conference to explain the incident.
How many platforms are there in this "transitional arrangement"? Wong Lok Yan, Director of the Licensing Division and Head of Fintech Division of the Intermediary Division of the SFC, said at a press conference on 9 September that it would not be announced, because the "surprise" announcement of the list would make investors mistakenly think that it was trustworthy.
Wong Lok Yan, Director of Licensing Division and Head of Fintech Unit of the SFC (left). (Photo by Zuo Langxing)
About there is a list, the words to the public listen, there is a side to apply for a tight license, I am actually the SFC looking at the law, do you think there is a list, the department is not a few appropriate. Because I was shocked to put a list on my website, investors mistakenly thought, why apply for a tight license trading platform, it is trustworthy, it is already regulated. I turned it back, and I had a list, and I had already been dealt a card. There are two trading platforms for the time being, which are on my list. Wong Lok Yan, Director of Licensing Division and Head of Fintech Division, Intermediary Department, SFC
On April 2023, 4, Hong Kong Web13 Festival 3, there are foreign cryptocurrency trading platforms with exhibition booths. (Reuters)
"Kick off" and "official attack" Are there any applications?
According to the statistics of the reporter of "Hong Kong 01", at least 15 cryptocurrency trading platforms in the market, or listed companies and securities companies, declare that they are "applying", "planning to apply", "starting the curtain", "officially attacking", and "expected to obtain a license in a certain year and month", most of these platforms are used by Hong Kong cryptocurrency investors, many of them have participated in Hong Kong's FinTech Week, Web 3.0 Carnival and other activities, but all of them have not been licensed by the Hong Kong Securities and Futures Commission.
For example, a US-based trading platform that had an exhibition booth at last year's Hong Kong FinTech Week placed an "Invited Content" advertisement in online media in September this year, using the phrase "Prelude to Applying for a License in the Hong Kong Market". What does "opening the curtain" mean?
In recent years, JEPX, a cryptocurrency platform trading platform that has sold advertisements in many places in Hong Kong, was involved in fraud and was investigated by the Securities and Futures Commission police. (Profile photo / Photo by Lo Hsien Liang)
A Hong Kong-based company with the name "Exchange" posted an announcement on its website in August that it would "be the third licensed virtual asset trading platform in Hong Kong to conduct Type 8 and Type <> regulated activities with a Notice of Approval in Principle issued by the Securities and Futures Commission of Hong Kong." The first and seventh categories, namely "securities trading" and "providing automated trading", do offer cryptocurrency trading platforms that users can still sign up for, but is the company on the list of "transitional arrangements"?
A Hong Kong-listed company that has been operating a cryptocurrency trading platform for many years announced in May this year that it would "officially attack" Hong Kong, but it is not known whether the platform is in a "transitional arrangement".
There are also a number of companies listed in China A-shares, NASDAQ and Hong Kong, claiming to be "applying", "proposing", "planning to apply", etc.
On May 2023, 5, the CSRC press conference explained the regulatory regime for operators of virtual asset trading platforms. (Profile photo / Photo by Zhang Haowei)
The list of 15 exchanges was asked one by one, and the SFC did not respond
Hong Kong 01 compiled a list of 15 transactions and asked the SFC whether these platforms were applying for a "virtual asset service provider licence" or whether their claims were accurate. However, the SFC spokesperson called back before the deadline saying that there was no response, no explanation of the reason, and no written reply.
"Surprised" investors misunderstand whether there is data to support it? No response
At the press conference on 9 September, Wong said that the announcement of the list would make investors mistakenly think that it was trustworthy, and that the SFC did not respond if there was data or investigation to support it.
LegCo member Ng Kit Chong believes that the SFC can not only know which applications are in the application, but also not mislead the public. (Profile photo / Photo by Yu Junliang)
Wu Jiezhuang: It should be disclosed to the public
Regarding the SFC's approach, LegCo member Ng Kit-chung said, "My idea is that if there is an application for inclusion and what it is, it should be disclosed to the public, because there are still nine months left in this transition period, so we do not want similar incidents during the transition period."
He believes that the public should be given as much information as possible, "hoping that the SFC can think about what applications are in place without misleading the public."
▼September 9 JPEX police arrest operation▼
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JPEX lazy bag|Detective reporter interviews cryptocurrency scam for ten years Analysis Lin Zuo was arrested JPEX was warned by the securities regulatory authorities 01 Multiple countries searched and uncovered the registration of "heads" in various places The actual person in charge is a mystery, JPEX was warned by the securities regulator Detailed explanation of the details of the operation of KOL's "solicitation of believers" The bitter owner had expected that there was a suspicious JPEX and was warned by the securities regulator Mainland user was invited to Hong Kong to withdraw money in July and was beaten Four JPEX wanted by the police, JPEX|claimed to continue to operate, and cancelled the Australian company registration on the same day Declared assets of less than A$7,1000