Hong Kong police, regulator form crypto task force as JPEX saga unfolds

The joint group was established in light of the ongoing crypto scandal in Hong Kong involving the JPEX crypto exchange.

The Hong Kong Police Force (HKPF) and the Securities and Futures Commission (SFC) have set up a crypto-focused working group to deal with illicit crypto exchange activities.

In an Oct. 4 statement, the SFC said the group was formed after a meeting with the HKPF on Sept. 28 amid continuing arrests and developments in connection to the Dubai-based JPEX exchange.

Days before the meeting, 11 people were detained for questioning over their possible role in the JPEX scandal, in which the SFC has alleged the firm has been promoting its services in the region without a license.

The working group’s aim is to enhance monitoring and investigation of illegal activities carried out by Virtual Asset Trading Platforms (VATPs) and will share information on suspicious activities, assess risks of suspicious exchanges, and collaborate on investigations.

Hong Kong’s regulators previously flagged they were looking to tighten crypto market regulations in the wake of the JPEX saga.

The group comprises officials from the SFC’s enforcement division and HKPF officials from its commercial, cybersecurity and financial intelligence and investigations bureaus.

Related: Hong Kong Stock Exchange launches settlement platform powered by smart contracts

In a statement, SFC enforcement director Christopher Wilson said the regulator looked forward to deploying its resources to combat “problematic VATPs and protect the interest of investors.”

Eve Chung, HKPF’s Assistant Commissioner of Police (Crime), said the working group is instrumental in exchanging intelligence and jointly responding to “challenges arising from VATPs, to better protect the general public of Hong Kong.”

The SFC has since published a list of all licensed, deemed licensed, closing down, and application-pending exchange’s along with a list of “suspicious VATPs.”

Magazine: Are DAOs overhyped and unworkable? Lessons from the front lines