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 Publish reported on Oct. 21. The choice comes after police arrested a few of these retailer house owners in reference to the alleged $192.7 million fraud perpetrated JPEX crypto alternate.
In Hong Kong, conventional cash changers are overseen by the Customs and Excise Division. Nevertheless, over-the-counter (OTC) cryptocurrency alternate 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, stated that Hong Kong regulatory our bodies are reviewing choices to fill the regulatory gaps uncovered by the JPEX scandal. Talking on tv, Ho stated:
“There are two features to [regulating] these OTC alternate retailers. One facet includes combating cash laundering and terrorist financing and the opposite is investor safety.”
In line with Ho, with a purpose to enhance Hong Kong’s crypto regulatory regime, each these features should be thought of.
Ho stated that the shopper division has witnessed elevated crypto cash laundering circumstances, particularly in large-scale schemes. She famous:
“Monetary expertise is changing into extra mature, so we’ve noticed rising exercise in digital asset transactions, which might simply be utilized by criminals for cash laundering because the transactions are extra hid and never restricted by time and placement.”
Subsequently, 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 verify whether or not her division is actively concerned in reviewing crypto rules, she stated there may be “at all times room to enhance the legislation 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 referred to as out among the platform’s duplicitous actions, together with false claims of being regulated in Dubai.
JPEX had used aggressive advertising and marketing techniques, together with billboards and influencer advertising and marketing, to realize clients. Among the influencers concerned in selling the platform have been arrested.
The JPEX scandal has shaken the belief of Hong Kong buyers in all the asset class. Police have arrested 28 individuals linked to the alleged fraud after receiving over 2,500 complaints from victims. The police investigation into the matter remains 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 considerations in regards to the contamination of the tokens.