Hong Kong’s ambition to become a global hub for digital assets is unquestionable. The government’s efforts to foster a conducive ecosystem for digital assets have been made to remain competitive in the international financial stage. However, the recent JPEX scandal, a Hong Kong-based cryptocurrency exchange, has stirred the waters of the developing cryptocurrency sector.
Mid-September saw JPEX introduce sky-high withdrawal fees, blocking users from accessing their funds, resulting in a monetary fallout estimated to surpass HK$1 billion (US$127 million). The incident has triggered a police investigation and damaged the public’s perception of cryptocurrency.
The JPEX scandal has cast a sombre shadow over Hong Kong’s cryptocurrency aspirations, potentially inciting scepticism towards the government’s Web3 initiatives. However, it has also exposed the regulatory challenge, which could potentially improve the safety net for retail investors, affirming the necessity of licensing virtual asset trading platforms.
The current volatility and risk in the cryptocurrency market
