Hong Kong’s Customs and Excise Division is seeking to tighten regulatory measures to handle the money-laundering dangers related to cash-for-crypto retailers, South China Morning Put up reported on Oct. 21. The choice comes after police arrested a few of these retailer homeowners in reference to the alleged $192.7 million fraud perpetrated JPEX crypto trade.
In Hong Kong, conventional cash changers are overseen by the Customs and Excise Division. Nevertheless, over-the-counter (OTC) cryptocurrency trade retailers at present function with out licensing or regulatory oversight. A few of these OTC retailers promoted JPEX’s funding choices, which the Securities and Futures Fee (SFC) deemed “too good to be true.”
Louise Ho Pui-shan, the commissioner of Customs and Excise, mentioned that Hong Kong regulatory our bodies are reviewing choices to fill the regulatory gaps uncovered by the JPEX scandal. Talking on tv, Ho mentioned:
“There are two features to [regulating] these OTC trade retailers. One facet entails combating cash laundering and terrorist financing and the opposite is investor safety.”
Based on Ho, as a way to enhance Hong Kong’s crypto regulatory regime, each these features have to be thought of.
Ho mentioned that the shopper division has witnessed elevated crypto cash laundering circumstances, particularly in large-scale schemes. She famous:
“Monetary know-how is changing into extra mature, so we’ve noticed growing exercise in digital asset transactions, which may simply be utilized by criminals for cash laundering because the transactions are extra hid and never restricted by time and site.”
Due to this fact, her division intends to boost worldwide cooperation to fight cash laundering facilitated by the anonymity of cryptocurrency transactions.
Later this month, Ho’s division will signal a memorandum of cooperation with its South Korean counterpart to bolster intelligence sharing and enforcement collaboration. Moreover, the division plans to advertise worldwide cooperation towards such crimes because it prepares to imagine the position of vice-chair for the Asia-Pacific area on the World Customs Group for a two-year time period beginning in July 2024.
Whereas Ho didn’t affirm whether or not her division is actively concerned in reviewing crypto laws, she mentioned there may be “at all times room to enhance the regulation enforcement and surveillance regime.”
Final month, JPEX customers began reporting difficulties in withdrawing belongings from the platform, which arbitrarily hiked withdrawal charges to exorbitant quantities. The SFC known as out among the platform’s duplicitous actions, together with false claims of being regulated in Dubai.
JPEX had used aggressive advertising techniques, together with billboards and influencer advertising, to achieve clients. Among the influencers concerned in selling the platform have been arrested.
The JPEX scandal has shaken the belief of Hong Kong traders in the whole asset class. Police have arrested 28 folks linked to the alleged fraud after receiving over 2,500 complaints from victims. The police investigation into the matter continues to be ongoing.
Bitrace, a blockchain analytics agency, reported final month that some Tether tokens processed in on-line wallets related to JPEX had been linked to cash laundering and on-line playing, elevating issues concerning the contamination of the tokens.