Wednesday, July 24, 2024

Chief Executive Signals Willingness to Cooperate on Granting More Powers to Regulate Crypto Exchanges: Latest Report.

John Lee, the Chief Executive of the Hong Kong Special Administrative Region, has addressed the investigation concerning the unauthorized virtual-asset trading platform, Hounax.

Chief Executive John Lee spoke about the current fraud involving virtual platform supervision on November 27. He underlined the need for government oversight to safeguard investors and take action against unlicensed platforms. He stated that he would be willing to work with authorities and provide further authority if necessary to take action against unauthorized cryptocurrency exchanges, according to a local news blog.

He said,

“The government will actively cooperate if regulatory agencies need to be given more power.”

His remarks emphasize the necessity of government oversight in order to safeguard investors and stop unapproved platforms in the cryptocurrency area, given that the current Hounax fraud case comes after a comparable event involving the cryptocurrency exchange JPEX. More than two thousand complaints were filed regarding the JPEX exchange fraud, which cost roughly $180 million in losses. 66 people have been detained in relation to the JPEX controversy. Local authorities in Hong Kong are tightening crypto laws in reaction to these incidents in an effort to avert other industry tragedies.

Regulators have stated that the one-year grace period for cryptocurrency exchanges in the nation will remain unchanged. To protect their interests, Lee advised investors to interact with virtual assets through authorized trading platforms.

The Hong Kong Securities and Futures Commission hereby specifically reminds investors that not all entities on the list of applicants for virtual asset trading platforms have received a license from the commission and may not abide by its requirements.

The Hounax Ponzi Scheme Affects Investors in Hong Kong, Underscoring the Difficulties in Crypto Regulation

On November 25, it was alleged that Hounax, another illegal exchange, conned consumers in Hong Kong out of 148 million HKD ($18.9 million) through a Ponzi scheme. The con artists posed as financial advisors and enticed victims with claims of substantial profits.

Users found that it was unable to withdraw their money, nevertheless, when they tried.

The Securities and Futures Commission designated Hounax as a suspicious cryptocurrency trading platform earlier this month after it was discovered that the platform had made false claims about its affiliations with venture capital firms and financial institutions.

Prior to being placed on the China Securities Regulatory Commission’s blacklist, HOUNAX, a cryptocurrency platform, was actively seeking new users in Hong Kong.

The original Coinbase technical team claimed to have co-founded it and that it had a Canadian MSB license. Additionally, it posed a danger to getting funding from renowned venture capital firms like Sequoia Capital and IDG Capital.

As of right now, 131 people have filed 88 reports with the police, claiming damages of $15.4 million. The victims ranged in age from 19 to 78, with a 69-year-old retired woman reporting the greatest loss of $1.54 million.

Authorities in Hong Kong are being closely examined as unlicensed cryptocurrency exchanges continue to deceive investors.

The Hong Kong Securities and Futures Commission (SFC) provided lists of licensed virtual asset trading platforms, applicants, closed platforms, and those deemed licensed in response to the Hounax fraud case. The SFC underlined that platforms intending to apply for a license must submit thorough compliance applications, including external evaluation reports.

Nine dubious virtual currency investment platforms were featured on the website. These include BitCuped, FUBT, futubit/futu-pro, EFSPD, OSL trading, JPEX, HOUNAX, BitCuped, and arrano.network. The SFC has acknowledged that it does not now have the authority to shut down unapproved cryptocurrency exchanges.

To stop additional harm to investors, some critics contend that authorities ought to intervene more forcefully, such as by preventing the platform from communicating with the public. Legislator Doreen Kong demanded more proactive measures to shield the public from fraudulent platforms, criticizing the reliance on an alert list. In order to shield investors from future losses, she underlined how critical it is to rectify the regulatory framework’s shortcomings.

In light of a case involving fraud on a virtual currency platform, Leung Fengyi, the CEO of the Hong Kong Securities and Futures Commission, also stressed the significance of supervision. Leung said that despite obstacles, Hong Kong is still committed to growing the Web3 ecosystem.

Cryptured Team
Cryptured Team
The writers team at Cryptured.com is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.
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