“Surge in Account Registrations at Hong Kong Cryptocurrency Exchange Post JPEX Debacle: A Silver Lining?”

Hong Kong cryptocurrency industry insiders have pointed out that the number of people trading virtual currencies has not decreased but instead increased with a more cautious attitude and more questions being asked, following the JPEX incident that occurred nearly four months ago. Since the JPEX cryptocurrency exchange collapsed, the Hong Kong police have reported that the amount of money involved in the case has exceeded 1.61 billion Hong Kong dollars (approximately 630 million New Taiwan dollars) and the number of fraud victims has exceeded 2,623. However, despite the JPEX incident, the attitude of the Hong Kong public towards cryptocurrencies seems to have been largely unaffected. According to a report by Hong Kong TVB, industry insiders in the local virtual currency industry have noted that public awareness of virtual currencies has significantly increased and people have become even more actively involved in investing since the JPEX incident. However, some JPEX investors have expressed genuine fear of investing in cryptocurrencies and plan to avoid it in the future. Licensed Hong Kong exchanges that are authorized to provide services to retail investors have also reported a significant increase in account openings following the JPEX incident, possibly due to the Securities and Futures Commission (SFC) naming JPEX as an unlicensed platform and emphasizing the high risks associated with unlicensed platforms. OSL’s Executive Director and Head of Regulatory Affairs, Dave Chapman, pointed out that the number of people signing up for cryptocurrency investment courses has also increased. In addition to wanting to make money, people are also learning how to avoid being scammed following the JPEX incident. However, he believes that currently only two platforms have obtained SFC licenses, which may still lead some investors to take risks and choose unlicensed platforms for investment. Blockchain technology consultant Wilson Lee suggested that the SFC should expand the types of tradable cryptocurrencies under controllable risk conditions. It is worth mentioning that the SFC has become more active 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. Currently, there are 11 virtual asset platforms on the SFC’s list of suspicious platforms: BitBank, LonShiX, Hong Kong Digital Research Institute, BitCuped, HOUNAX, FUBT Exchange, Futu Pro, Futubit, EFSPD, JP-EX Crypto Asset Platform Pty Ltd, and OSL Exchange. In addition to regulating virtual asset exchanges, the Hong Kong government has also announced plans to regulate over-the-counter (OTC) cryptocurrency dealers that were implicated in the JPEX case. Hong Kong’s Financial Secretary, Paul Chan, stated in October that the government is considering revising the legislation governing OTC cryptocurrency exchanges and implementing relevant regulatory arrangements, but no timetable for the introduction of OTC regulations has been provided.