23rd September 2023 – (Hong Kong) The Securities and Futures Commission (SFC) has issued a warning after JPEX, a cryptocurrency exchange platform, falsely claimed to be applying for a license. During a press conference, the SFC stated that it would not disclose the list of applicants for the licence under “Virtual Asset Trading Platform Operators” citing concerns that the public might mistakenly trust these platforms.
At least 15 cryptocurrency trading platforms, including publicly listed and securities companies, have been promoting themselves as “in the process of applying,” “planning to apply,” or “expected to obtain” the license at a certain time. The SFC is investigating the accuracy of these claims and whether they are indeed in the application process. However, the SFC has refused to confirm the veracity of these platforms’ assertions and has declined to provide a written response, only stating verbally that there is no response.
On 13th September, the SFC specifically called out JPEX, accusing them of six offences. These included making false or misleading statements through Key Opinion Leaders (KOLs) and over-the-counter (OTC) shops, claiming that JPEX had independently or in collaboration with a Hong Kong-listed company applied for a virtual asset trading platform license in Hong Kong. However, the fact remains that JPEX has never submitted an application.
In response, JPEX argued that their announcement on 23rd February of this year indicated their intention and plans to apply for a licence in Hong Kong. They emphasised that it was a future consideration rather than a current application.
Hong Kong introduced the “Virtual Asset Trading Platform Operators licensing regime, which came into effect on 1st June, 2023, with a one-year “transitional period.” During this period, platforms that were “operating genuine businesses in Hong Kong and had established genuine business premises” before June can continue participating in the transitional arrangement until the end of May next year. Failure to comply would be considered illegal. Within the transitional period, existing platforms have nine months to submit their applications. Those not intending to apply for a licence should gradually wind down their operations over the twelve-month transitional period.