Hong Kong regulators are looking to tighten the noose around the cryptocurrency market, with six people arrested for alleged fraud surrounding unlicensed cryptocurrency exchange JPEX.

Hong Kong Chief Executive Lee Ka-chiu told reporters on September 19 that the government will step up efforts to inform investors and remind them to only use platforms licensed by the Securities and Futures Commission. report Associated Press.

The JPEX issue came into focus on September 13 when the Securities and Futures Commission informed the public that it had received more than 1,000 complaints about unregistered cryptocurrency trading platforms, claiming losses exceeding HK$1 billion (US$128 million).

The SFC pointed out in the warning that JPEX promotes the platform’s services and products to the Hong Kong public through internet celebrities and over-the-counter currency exchangers.

As the JPEX issues came to light, many users of the platform found themselves unable to withdraw funds, while others complained of dwindling wallet balances. After Hong Kong regulators issued a warning to the exchange, the platform reportedly increased withdrawal fees to $1,000 to discourage users from withdrawing their assets.

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The cryptocurrency exchange later blamed third-party market makers for the ongoing liquidity crisis on the platform, which resulted in an increase in withdrawal fees. Hong Kong police have also arrested influencer Joe Lam (Francis Lam) for his ties to JPEX.

In 2023, Hong Kong established itself as a growing cryptocurrency hub by passing pro-cryptocurrency legislation and opening its cryptocurrency trading market to retail customers. However, due to lack of knowledge and awareness, permissionless crypto platforms like JPEX have fooled many users in the country. Regulators are currently working to educate people to only use licensed platforms for cryptocurrency trading activities.

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