As the JPEX scandal continues to erupt, Hong Kong authorities are scrambling to solve the matter.
JPEX, a Dubai-based firm, was established in 2019 and has been operating in Hong Kong since July 2020. Its Hong Kong office was raided earlier this month, trapping millions of investors' crypto.
Its collapse is compared to FTX, but the unravelling of JPEX in Hong Kong has several key differences. It's not clear who runs it, for one, he said. And few industry insiders had heard of JPEX before, beyond its city-wide advertising campaigns.
As authorities rush to find the missing - and so far, unknown - culprits and appease angry investors, the impact on the crypto-friendly Asian hub has been far-reaching. According to the State Department, more than 2,300 people have been killed.
The JPEX scandal has led authorities to shut down several crypto shops that were particularly popular with visitors from mainland China.
On September 13th, Hong Kong's Securities and Futures Commission warned the public that JPEX was not licensed to operate in the region, highlighting alleged violations of sections of the Anti-Money Laundering and counter-terrorism Financing Ordinance.
On September 17, JPEX blamed third-party market makers for its liquidity crisis and theresulting fee rise. The company said it will return everything to normal.
alongside Chok, two YouTubers - Chan Wing-yee and Chu Ka-fai - were arrested.
Hong Kong Chief Executive John Lee highlighted the need for firms to adhere to licensing regulations.
With the end of the year 2024, only four exchanges have applied for licenses, including HKBitEx, Hong Kong BGE, HKVAX, and Victory.
Tyler Pearson is a research analyst at DL News. He is based in Alberta, Canada.