The Securities and Futures Commission (SFC) has established a crypto-focused task force in partnership with the Hong Kong Police Force (HKPF) to investigate and deal with illicit activities associated with crypto exchanges. The joint force was created after the recent scandal in Hong Kong amid continuing arrests and developments in connection to the Dubai-based crypto exchange, JPEX.
The SFC in a statement released on Oct. 4, said that the group was formed after a meeting with the HKPF on Sept. 28. Few days before the meeting was held, the SFC also stated that the firm had been promoting its services in the region without a license. In regards to that, they detained 11 people for questioning over their possible role in the JPEX scandal.
The working group was created to investigate and share information on illegal activities and breaches carried out by virtual asset trading platforms (VATPs), assess risks of suspicious exchanges, and enhance coordination and collaborate on investigations.
Following the JPEX scandal, Hong Kong’s regulators have signaled their intent to strengthen regulations governing the crypto market. The authorities have expressed concerns about potential risks posed by the crypto industry and have indicated that tighter rules are necessary to protect investors and ensure market integrity.
Aside from SFC’s enforcement division and HKPF officials, the group also comprises officials from its commercial, cybersecurity and financial intelligence and investigations bureaus.
SFC enforcement director Christopher Wilson in a statement, said that the regulator looked forward to deploying its resources to combat “problematic VATPs and protect the interest of investors.”
HKPF’s Assistant Commissioner of Police (Crime), Eve Chung, stated that the task force is essential in exchanging intelligence and jointly responding to “challenges arising from VATPs, to better protect the general public of Hong Kong.”
The SFC has released a list of all licensed and deemed licensed crypto exchanges, as well as those that are closing down or have pending applications, along with a list of “suspicious VATPs.”
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