The government of Hong Kong has stated that the recent $165 million scandal involving the crypto exchange JPEX will not hinder its plans for Web3 development in the region.
During a Nov. 2 keynote at Hong Kong Fintech Week, Christopher Hui, the region’s Secretary for Financial Services and the Treasury, confirmed that the government’s Web3 market growth plans remain unaffected by the JPEX saga.
“We’ve been asked many times whether JPEX will affect our determination to grow the Web3 market — the answer is a clear ‘no,’” Hui stated.
Hui was referring to the financial scandal involving the Dubai-based exchange JPEX, in which over 2,500 Hong Kongers allege they were defrauded. This prompted the Securities and Futures Commission (SFC) to issue a warning that JPEX was operating in the region without a license.
In response to JPEX’s alleged actions, Hong Kong has announced plans to tighten its crypto regulations. The SFC has also collaborated with the police to form a task force that will address illicit crypto exchange activities. The SFC has updated its policies on crypto sales and requirements accordingly.
“A lot of things are going on on the regulatory front,” Hui commented. Part of the government’s future Web3 regulatory plans include the SFC issuing guidance on tokenized securities and the tokenization of SFC-authorized investment products. Additionally, crypto regulations will be expanded to encompass buying and selling activities “beyond trades taking place on now-regulated trading platforms,” according to Hui.
Furthermore, a joint stablecoin consultation by the Hong Kong Monetary Authority (HKMA) and the Financial Services and the Treasury Bureau is set to be released soon. This consultation will seek feedback from a January HKMA discussion paper.
Earlier this year, reports indicated that the HKMA had pressured banks in the region to provide services to crypto companies. Hui confirmed that the HKMA will consult the sector on guidance for banks offering crypto custodial services.
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