
Hong Kong's police force and the securities industry's leading securities regulator, the Securities and Futures Commission, have established a joint task force to monitor suspicious activity on crypto exchanges.
The SFC said the task force was formed after a high-level meeting between the two authorities on September 28. Its main objective is to enhance their collaboration in monitorling suspicious and illegal activities on virtual asset trading platforms or crypto exchanges.
The task force includes employees of the police force's Cyber Security Financial Intelligence, Cyber Security Financial Intelligence, and Investigations divisions, and representatives of the SFC's Enforcement and Intermediaries divisions.
The mission of the working group is to share information on suspicious and illegal exchange activities, develop a mechanism to evaluate the risk of suspicious exchanges, and collaborate and incorporate their agencies' activities in related investigations.
Hong Kong's new task force comes in as the city-state grapples with the recent JPEX incident, a case ofalleged fraud involving a Dubai-based crypto exchange operating in Hong Kong without licensing.
There are believed to be at least 2,305 victims of the incident, collectively defrauding HK$1.43 billion, making JPEX one of the largest cases of financial fraud in Hong Kong history.
On September 25, Hong Kong's securities and futures Commission announced new measures to enhance transparency and security in the cryptocurrency industry.
The measures also include the release of a complete list of licensed, deemed-licensed, closing down, and application-pending VATPs.
The surge in cryptocurrencies in London has led to a sudden surge in the city's cryptocurrencies. In a recent report, Chainalysis reported, recent inflows to Hong Kong have rivaled that of mainland China, despite hosting only 0.5% of the nation's population.
China enacted a sweeping crackdown on crypto mining and trading activity within its borders in 2021, but Hong Kong's more welcoming stance may prompt mainland policymakers to adopt a more softer stance, Chainalysis says.