Crypto exchange grace period to remain unchanged in Hong Kong despite scandals

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A one-year grace period for cryptocurrency exchanges working in Hong Kong will remain in place despite current scandals.

According to native information experiences on Nov. 27, Julia Leung, CEO of Hong Kong’s Securities and Futures Commission, stated, “Even if the grace period ends tomorrow, fraud will still occur, so there is no intention to modify the grace period and other measures for the time being.” 

According to new regulations introduced in June, crypto exchanges working in Hong Kong should apply for a digital asset service supplier (VASP) license with the town’s Securities and Futures Commission by June 2024 or face deregistration. However, unregistered exchanges can function in the town through the interim transition period. 

Several crypto scandals have rocked the particular administrative area not too long ago. In September, Hong Kong crypto exchange JPEX, which was unlicensed on the time, collapsed after allegations of a Ponzi scheme led to 66 arrests and an estimated 1.6 billion Hong Kong {dollars} ($205 million) in losses. 

On Nov. 25, Hounax, one other unlicensed crypto exchange, reportedly scammed 131 residents out of 120 million HKD ($15.4 million) by means of one more alleged Ponzi scheme. Chan Waikei, superintendent of the Hong Kong Police’s Commercial Crime Bureau, defined that scammers impersonated funding specialists and solicited customers with the promise of excessive returns. When customers later tried to withdraw the funds, they may not accomplish that. 

On Nov. 27, Cointelegraph reported that the Binance-linked HKVAEX exchange remains to be trying to apply for a license in Hong Kong. Earlier this month, BC Technology Group, proprietor of Hong Kong crypto exchange OSL, secured a $90 million investment from blockchain firm BGX

Related: Binance-linked HKVAEX still preparing to apply for license in Hong Kong