Hong Kong Securities and Futures Commission Liang Fengyi: The JPEX incident reflects the importance of supervision in promoting industry development

Odaily Planet Daily reported that the virtual asset trading platform JPEX was suspected of fraud. Hong Kong Securities and Futures Commission Chief Executive Liang Fengyi said that this incident allows regulatory agencies to strengthen supervision of virtual asset activities more comprehensively, reflecting the importance of supervision in promoting the development of the industry. She said that there are already many safeguards in place to ensure that investors will not change Hong Kong’s announced virtual asset development policy because of suspected illegal activities. Liang Fengyi emphasized that the original intention of formulating virtual asset supervision regulations was to provide a regulated channel so that investors’ assets could be isolated and protected. She said that other financial products cannot completely eliminate fraud. The most important thing is to have a mechanism to reassure investors. In the future, she will strengthen information dissemination and investor education, hoping to promote the development of the industry. Liang Fengyi reiterated that since the regulatory laws related to virtual assets came into effect on June 1, and the China Securities Regulatory Commission has obtained more comprehensive powers to investigate illegal propaganda, it has continued to collect evidence on the JPEX case in the past three months. However, the investigation takes time and the target of the investigation must be determined. In response, it emphasized that it has been communicating with the police on cases of suspected fraud. When asked whether the one-year transition period provided by the China Securities Regulatory Commission for virtual asset trading platforms has become a regulatory loophole for such fraud cases, Huang Lexin, director of the financial technology group, said that illegal activities will occur regardless of whether there is a transition period, and the relevant arrangements are for those already in the market. Hong Kong-operated trading platforms have a reasonable time to prepare for applying for licenses, improve monitoring and comply with regulatory rules, and have already expressed to the industry early on that if they have no intention of applying for a license, they should close down in an orderly manner and stop actively promoting their business. (RTHK website) It was previously reported that the Hong Kong Securities and Futures Commission will take a number of measures to strengthen information dissemination and investor education in response to recent public concerns about unregulated virtual trading platforms. Leung Fengyi, Chief Executive of the Hong Kong Securities and Futures Commission, said that the Securities and Futures Commission will publish four lists of virtual asset platforms online, including a list of licensed platforms, a list of completed platforms, a list of platforms deemed to be licensed, and a list of new applicants. In addition, the China Securities Regulatory Commission will publish a list of suspicious virtual asset trading platforms to help the public become more alert to local unlicensed or suspicious operating practices. The SFC will publish the relevant list on its website and will consider providing more information about unregulated virtual asset platforms to alert the public as soon as possible.