Hong Kong’s securities regulator and police have set up a joint task force to monitor and investigate suspicious activities on cryptocurrency exchanges.

The move follows a dispute at the JPEX cryptocurrency exchange last month that led to multiple arrests and the closure of the platform’s services. The unlicensed exchange was accused of defrauding investors of $204 million.

The task force is made up of Hong Kong's Securities and Futures Commission (SFC) and law enforcement officials, including representatives from commercial crime, cybersecurity and technology crime, and the Financial Intelligence and Investigation Police.

The announcement stated that it will "strengthen the monitoring and investigation of illegal activities related to virtual asset trading platforms."

Protecting the Hong Kong public

Additionally, the JPEX incident could complicate Hong Kong’s efforts to become a regional cryptocurrency and fintech hub.

Hong Kong introduced a new regulatory framework for crypto assets earlier this year and issued its first mandatory license for a digital asset trading platform in August.

Vince Turcotte, a consultant at crypto licensing consultancy Cognitive GRC, said:

“This strengthens Hong Kong’s reputation as a safe and compliant jurisdiction for virtual asset business, and the establishment of the task force is a positive step in boosting confidence in the new regime.”

Hong Kong officials are working to learn more about the spread of cryptocurrency in 2022 and the multiple crashes of well-known platforms.

Assistant Commissioner of Police Eve Chung said the task force “facilitates rapid exchange of important intelligence and joint collaboration to address challenges posed by virtual asset trading platforms (VATPs), thereby better protecting the public of Hong Kong.”

In mid-September, the CSRC contacted relevant influencers, opinion leaders, and OTC trading outlets to ask them to stop promoting JPEX and its services. This was followed by a further crackdown on influencers associated with the defunct cryptocurrency exchange.

JPEX Dividend Plan

Additionally, JPEX continues to implement a controversial plan to convert users’ assets into shareholder dividends that will not be paid until two years later.

The company claims the move will increase cash flow and retain investors. Users will reportedly receive dividends in various forms over two years based on their shareholding ratio.

This week, JPEX said that the referendum it held with its users had concluded, with 68% of users voting in favor of the dividend plan.

Meanwhile, police have now arrested a 19th suspect in connection with the case and seized his Porsche. #JPEX  #加密货币