2023-10-06 10:19:57
Hong Kong Secretary for Financial Services and the Treasury Henry Hui Ching-yu said today that the JPEX case reflects the risks of unregulated trading platforms, the importance of effective supervision and investor protection. He also mentioned that Hong Kong will not formally regulate stablecoins until it formally regulates them. Allow stablecoins to be included in retail sales.
(Previous summary: 6 more people were arrested in the JPEX case! According to Hong Kong police statistics, 2,528 victims have reported the case so far, and the amount involved exceeded NT$6.3 billion)
(Background supplement: Exaggeration! JPEX suspected “forced exchange” of user assets to JPC, and the black box DAO plan sparked dissatisfaction)
The cryptocurrency exchange JPEX was involved in a conspiracy to commit fraud, which has attracted attention. So far, 2,528 victims have reported the case, and the amount involved has exceeded NT$6.3 billion.Hong Kong Secretary for Financial Services and the Treasury Hui Ching-yu todayAttendInvestor and Financial Education Council visits programexpressthis incident reflects the risks of unregulated platforms and the importance of supervision.
Xu Zhengyu pointed out that the risks of investing in unregulated platforms are high. Since these trading platforms lack transparency and may not be stable in operation, investors may have no way to complain if they have disputes with the platform. If the platform goes bankrupt, ceases operations, commits fraud, breach of contract or even theft, , investors are likely to lose all the assets stored on the platform.
Still open to financial innovation
In addition, Xu ZhengyuexpressAs an international financial center, Hong Kong has an open and compatible attitude towards financial technology innovation. The technological elements involved in virtual assets, such as blockchain and distributed ledger technology, are beneficial to the operation and circulation of the financial system, and are also conducive to Web 3.0. and Yuan Universe will develop in the future. Therefore, we must not only control the market and risks, but also hope to explore relevant technological elements to promote the further development of financial technology in Hong Kong.
However, Xu Zhengyu admitted that virtual assets always have a high degree of anonymity. Criminals may use virtual assets to launder money or raise funds for terrorist activities and other illegal activities. Therefore, there must be moderate and appropriate supervision while developing.
Retail trading of stablecoins is temporarily not allowed
In the past, virtual asset trading platforms usually used stablecoins such as USDT as trading media. Xu Zhengyu said that relevant currencies in the market would support their value with US dollars or gold, with the goal of stabilizing prices. However, there have been price fluctuations in stablecoins in the past. Even collapse.
In Xu Zhengyu’s view, the reserve management of stablecoin issuers will affect price stability and investors’ rights to redeem fiat currency. Taking these factors into account,Until Hong Kong officially regulates stablecoins, retail trading will not be allowed for the time being.
Further reading:Hong Kong Monetary Authority: It is establishing a regulatory framework for digital Hong Kong dollars and stable currencies to promote the tokenization of bank deposits
Services such as staking are also not allowed
As for the launch of diversified investment products on some trading platforms, including pledge, income, deposits, derivatives trading and other services, Huang Lexin, Director of the Licensing Section and Head of the Financial Technology Group of the Intermediary Department of the Hong Kong Securities and Futures Commission, believes that the platform needs to be “more neutral”, To prevent conflicts of interest, virtual asset trading platforms licensed by the China Securities Regulatory Commission are currently not allowed to provide the above-mentioned buying and selling services.
Huang Lexin said that the current licensed platform only allows retail investors to buy and sell Bitcoin (BTC) and Ethereum (ETH). Under the license requirements, the platform needs to submit a report to the China Securities Regulatory Commission for new currencies, and can only trade following approval.
Hong Kong Securities and Futures Commission reiterates strict requirements for license applications
Huang LexinmentionedThe Hong Kong Securities and Futures Commission has strict requirements for approving virtual asset platform license applications. Under the new system, virtual asset trading platforms, like traditional financial institutions, must comply with a number of regulatory requirements, including financial stability, responsible persons and directors are suitable candidates, Platforms are required to properly safeguard customer assets and know their customers, and there are also provisions to combat money laundering, prevent market manipulation, and avoid conflicts of interest, while focusing on cybersecurity.
The Hong Kong Securities and Futures Commission reminds that trading platforms need to assess customers’ knowledge and risk tolerance levels of virtual assets, and also need to set an investment limit for each customer with reference to the customer’s financial and personal situation. At the same time, the platform is required to include virtual assets for retail investors to buy and sell. Conduct reasonable due diligence and disclose sufficient information to investors.
Huang Lexin emphasized that virtual assets are a high-risk product and not everyone is suitable for buying and selling. Investors should consider their ability to bear risks, do their homework, and do not follow the trend of speculation.
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