JPEX’s Ongoing Saga: Deregistration, Telecom Blocks, and Regulatory Disputesby Fintech News Hong Kong September 21, 2023
JPEX stated that all company members agree with the move, the company is no longer operating, its assets are less than AU$1,000, and it has no liabilities in the filing.
So far 11 people have been arrested in connection with the case, including social media influencers Joseph Lam and Chan Yee, as the number of alleged victims now stand at 2,086 with losses amounting to HK$1.3 billion.
Yet JPEX continues to cry foul saying that several telecoms service providers in Hong Kong including 1010 and CSL has “unreasonably blocked its mobile application and official website” at the behest of the the Securities and Futures Commission (SFC) in a statement on 20 September.
The crypto exchange suggested that it users use a VPN instead to bypass this to access its app and website. JPEX is seemingly keen to continue keeping up appearances.
“Here, we strongly reiterate that, even in the face of such oppression and unfair treatment, our platform will continue to operate as usual. Users can log into our mobile application or operate on our web version using VPN applications like Surfshark. We will continue to uphold our responsibility and provide full-fledged services to all users.”
JPEX claims that the SFC “suddenly made a series of accusations against its platform’s operating model and promotional methods” since 13 September 2023 which the firm “vehemently resent(s) as they were made without investigation or review.”
The crypto firm added that the SFC had repeatedly denied the platform’s attempts at communications. JPEX claims that these actions point towards SFC’s “prejudice and unfair treatment” towards its platform.
Previously, JPEX revealed that it had requested for guidance from the SFC on 15 September 2023, just two days after SFC issued a warning about JPEX, but instead received a response saying that the commission had referred the matter to the police. The company even shared a screen grab of the email correspondence.
SFC shoots down JPEX’s claims of unfair treatment
When SFC discovered that JPEX had publicised the confidential correspondence, the regulator release a statement saying that it “deeply regret” the firm’s actions which is in breach of the secrecy/confidentiality provisions of the Securities and Futures Ordinance (SFO) and the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO).
The regulator countered that JPEX has actually been on its radar since March 2022 and had begun making enquiries into its suspected false and misleading representations and unlicensed activities.
SFC stated that it was JPEX that has been uncooperative and unable to substantively respond to the SFC’s requisitions and was subsequently placed on its investors alert list in July 2022.
The commission added that it had joined forces with the Financial Education Council to have issued warnings about JPEX on at least nine occasions through the websites, social media platforms as well as TV and radio channels well before issuing a public statement on 13 September.
“The SFC affirms that JPEX has never approached the SFC in respect of any potential license application, and that no entity in the JPEX group is licensed by the SFC or has applied to the SFC for a license to operate a virtual asset trading platform in Hong Kong.
As such, there has been no communication between the SFC and JPEX on licensing-related matters. Subsequent information obtained has led to suspicion of fraud and the SFC has referred the matter to the Police. As investigations are ongoing, the SFC cannot make any further comment.”