Hong Kong’s police force and the Securities and Futures Commission (SFC) have formed a joint task force to monitor suspicious activity on crypto exchanges.
According to a statement published by the SFC, the task force was established after a high-level meeting between the two authorities on September 28. Its main objective is to enhance collaboration in monitoring suspicious and illegal activities on Virtual Asset Trading Platforms (VATPs), or crypto exchanges.
The task force comprises members from the police force’s Commercial Crime, Cyber Security Financial Intelligence, and Investigations divisions, as well as representatives from the SFC’s Enforcement and Intermediaries divisions.
The working group aims to share information on suspicious and illegal exchange activities, establish a mechanism to assess the risk of suspicious exchanges, and collaborate and integrate their agencies’ activities in related investigations.
Hong Kong clamps down post-JPEX
Hong Kong has established this new task force following the recent JPEX incident, which involved suspected fraud by a Dubai-based crypto exchange operating in Hong Kong without proper licensing.
The incident has affected at least 2,305 victims who were collectively defrauded of HK$1.43 billion ($182.9 million), making it one of the largest cases of financial fraud in Hong Kong’s history.
On September 25, the SFC announced new measures to enhance transparency and security in the cryptocurrency space.
These measures include the publication of a comprehensive list containing licensed, deemed-licensed, closing down, and application-pending VATPs.
These actions have been taken due to the recent surge in cryptocurrencies in Hong Kong, with the city receiving inflows comparable to those in mainland China, despite having a much smaller population.
China’s crackdown on crypto mining and trading activities within its borders may lead mainland policymakers to adopt a more lenient approach, influenced by Hong Kong’s more welcoming stance, according to Chainalysis.
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