Amid JPEX fallout, Hong Kong’s John Lee warns investors to only trade on regulated virtual asset platforms

Chief Executive John Lee says authorities will conduct more investor education after police receive over 1,600 complaints alleging fraud against cryptocurrency exchange

Lawmaker Johnny Ng urges Securities and Futures Commission to make public information concerning both licensed and unlicensed operators

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Police loading gathered evidence into a vehicle after arresting and raiding the office of influencer Joseph Lam, who had touted JPEX products. Photo: Jelly Tse

Published: 12:35pm, 19 Sep 2023Updated: 10:11pm, 22 Sep 2023

Investors should only trade on regulated virtual asset platforms, Hong Kong’s leader has warned amid the fallout over embattled cryptocurrency exchange JPEX as he underscored the importance of controls.

Chief Executive John Lee Ka-chiu on Tuesday also pledged that authorities would step up investor education after police received more than 1,600 complaints alleging fraud against JPEX. Eight people have been arrested over the case.

“This incident highlights the [important point] that when investors want to invest in virtual assets, then they must invest on platforms that are licensed, that are regulated by the Securities and Futures Commission (SFC) … This is the only way to ensure their investments are protected,” Lee told the media before his weekly meeting with key decision-making body the Executive Council.

Hong Kong leader John Lee takes the stage to address the press before his weekly Exco meeting. Photo: Sam Tsang

In developing the virtual assets market in Hong Kong, the government would ensure there was effective regulation and transparency in the release of information, Lee said.

But he also acknowledged that many trading platforms were located outside Hong Kong or established before the city’s ring-fenced regulatory framework came into force on June 1, after a lengthy consultation that sought to turn the city into a hub for virtual assets and Web3 activities.

Lee said authorities would conduct “more public education for investors” on the operation modes of virtual asset platforms and how the regulatory regime would ensure sufficient protection for users.

Lawmaker Johnny Ng Kit-chong said that the rise in virtual trading and the use of digital currencies over the years had brought more than 100 platform operators to the city, attracting customers with promises of high returns.

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