Hong Kong’s Trust in Crypto Plummets Following JPEX Scandal
Regulators in Hong Kong recently issued a warning against a local cryptocurrency exchange called JPEX. On this account, the regulator warned the public from dealing with the exchange platform that falsely advertised itself as a regulated trading platform.
However, the regulators in Hong Kong retained that JPEX was not among the cryptocurrency exchanges that had applied for registration with the Securities and Futures Commission of Hong Kong (SFC).
The warning later turned into arrests and morphed into an investigation. However, the scandal and uproar around this sector have caused investors in the region to have shaky faith in the cryptocurrency region.
Changing Attitude of Hong Kong Residents Towards Crypto
A recent study published by the School of Business and Management at Hong Kong University of Science and Technology published a survey on the matter. The survey report discussed the changing attitude of Hong Kong citizens regarding the cryptocurrency sector.
The survey collected feedback from investors between September and October. Around 41% of the participants in the survey claimed that they do not wish to invest in cryptocurrencies.
JPEX Scam
The survey report also indicated that the percentage of investors not preferring to invest in cryptocurrencies has increased by 12% since the beginning of the ongoing year.
Furthermore, the occurrence of the JPEX scam has resulted in around 20% respondents of in the survey showing interest in acquiring digital currencies in the future. This metric has also dropped by 5% since the beginning of the month.
The second survey on the same matter started on 28 September and continued till 20th October this year. It contained a total of 2200 participants till 5th October.
The report also contained a long survey that ran for four weeks duration between 24th April and 25 May. In this survey, a total of 5700 people voted with ages ranging from 18 and up.
On the other hand, the regulators in the region have continued to work on upgrading the regulatory requirements surrounding cryptocurrency entities in the region. JPEX raises questions regarding the crypto-friendly stance of the regulators towards the cryptocurrency sector within Hong Kong.
However, the suspicious trading platform never issued a proper reason for failing to comply with the regulatory requirements.
Hong Kong Regulators are Working on a Regulatory Framework to Ensure Investor Protection
The issues regarding the JPEX exchange are seen as the same as the controversy around the fall of the FTX exchange. The perspective of cryptocurrency investors hailing from the region has devolved as per the survey conducted by academics from Hong Kong University.
At the same time, regulators in the region have continued to upgrade and amend the regulatory requirements for cryptocurrency entities and projects in the region to ensure safety for virtual currency investors.
A few months ago, the regulators in the sector shared the plan for the region to emerge as the leading region in Asia for blockchain innovation and activity.
On this account, the regulators from Hong Kong issued a series of policies in October last year. These policies indicated the continued effort of the regulators in the region in the development of digital currency ventures.
In May this year, Hong Kong enabled retail investor access for retail investors. In December last year, the legislative council of the country contained amendments for the licensing process of virtual currency investment services providers.
At the same time, a study on FOREX claims that during July 2022, Hong Kong was the best-prepared region in terms of wider virtual currency adoption with a score of 8.6.
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