Hong Kong’s cryptocurrency industry has seen an increase in the number of people trading virtual currencies since the JPEX incident in September, although attitudes have become more cautious. People are now asking more questions before engaging in cryptocurrency transactions.
Following the revelation by the Hong Kong Securities and Futures Commission (SFC) of nine “suspicious cryptocurrency exchanges,” the amount of losses incurred by JPEX has risen to HKD 1.61 billion.
Despite the JPEX incident, which has been ongoing for over three months, the Hong Kong public’s attitude towards cryptocurrencies seems to be largely unaffected. According to reports from Hong Kong’s TVB, industry insiders suggest that the incident has actually increased public awareness and participation in virtual currency investments.
However, some JPEX investors have expressed fear and hesitation towards cryptocurrency investments in the future. Licensed exchanges that are authorized to provide services to retail investors have reported a significant increase in new account openings following the JPEX incident. This may be due to the SFC’s naming of JPEX as an unlicensed platform and emphasizing the associated high risks.
Industry insiders have also noted an increase in the number of people enrolling in cryptocurrency investment courses. They believe that, besides the desire to make money, the JPEX incident has motivated people to learn how to avoid being deceived. However, as there are currently only two platforms licensed by the SFC, some investors may still take risks by choosing unlicensed platforms for investment.
Blockchain technology consultant Li Sicong has recommended that the SFC expand the types of tradable cryptocurrencies, provided that risks are manageable.
It is worth mentioning that the SFC has been more proactive in disclosing a list of suspicious trading platforms following the JPEX incident. In addition to the previous nine platforms, two more platforms, BitBank and LonShiX, were added to the list in mid-December.
The current list of 11 virtual asset platforms identified as suspicious by the SFC includes:
1. BitBank
2. LonShiX
3. Hong Kong Digital Research Institute
4. BitCuped
5. HOUNAX
6. FUBT Exchange
7. Futu-Pro
8. FutuBit
9. EFSPD
10. JP-EX Crypto Asset Platform Pty Ltd
11. JPEX Technical Support Co. Pty Ltd
12. Arrano Network
13. OSL Exchange
The Hong Kong government is not only prioritizing regulation of virtual asset exchanges but has also announced plans to regulate OTC cryptocurrency dealers that are extensively linked to the JPEX case. Hong Kong’s Financial Secretary, Paul Chan, stated in October that the government is considering amending the legislation governing OTC cryptocurrency exchanges and implementing related regulatory arrangements, but no timeline has been provided for the introduction of the OTC regulations.