Hong Kong financial watchdog, the Securities and Futures Commission (SFC) has joined forces with the Hong Kong police to track suspicious crypto activities in the region. This is coming as crime rate around cryptocurrencies continue to increase as more crypto companies rush to the crypto hub.
The SFC said in a statement released on Wednesday stated it teamed up with the Hong Kong Police Force (HKPF) for monitoring and investigating illegal activities related to Virtual Asset Trading Platforms (VATPs).
The partnership comes after a high-level meeting of the two parties, with participants including representatives from the HKPF’s Commercial Crime Bureau, Cyber Security and Technology Crime Bureau and Financial Intelligence and Investigations Bureau and the SFC’s Enforcement Division and Intermediaries Division.
Speaking on collaboration, the Assistant Commissioner of Police (Crime), Ms Eve Chung, said “The implementation of the new platform between the Police and the SFC is instrumental to fast-tracking of vital intelligence exchange and joint collaboration in responses to the challenges arising from VATPs, so as to better protect the general public of Hong Kong.”
Specific responsibilities of the working group include facilitating the sharing of information on suspicious activities and breaches of VATPs, implementing a mechanism to assess the risks of suspicious VATPs, and enhancing coordination and collaboration in related investigations.
Also commenting on the partnership, the SFC’s Executive Director of Enforcement, Mr Christopher Wilson, said, “We have always valued our working relationship with the Police and we look forward to our even closer collaboration in deploying our respective expertise and resources in combatting problematic VATPs and protecting the interest of investors.”
Responding to the JPEX Incident
The task force for tracking suspicious activities around virtual assets is coming shortly after the JPEX exchange incident. Although not expressly mentioned, the collaboration is likely a strategy to combat similar situations in the future before they happen.
JPEX, a crypto exchange operating in Hong Kong came under the SFC and police spotlight when over 80 users reported issues with the exchange to the tune of $3.4 million. Investigations started and at least 20 people, including influencers were arrested in connection to the incident.
The SFC stated at the time that JPEX made false claims that it had applied for a regulatory license with the watchdog, a situation that led to the publishing of the list of crypto companies that have applied for licensing in Hong Kong. This was in a bid to enlighten Hong Kong investors so they can identify fraudulent crypto companies and avoid them.
This step goes to show that although Hong Kong remains committed to working with crypto companies in its jurisdiction, it will not do so at the detriment of its citizens.
Hong Kong’s Pro Crypto Stance
Hong Kong is known for its openness towards crypto and blockchain technology. The region has severally stated clearly that it intends to allow crypto businesses thrive, and it backed up its words with action when it released clear guidelines for licensing of crypto companies.
The Chinese administrative region has set itself apart, despite mainland China’s anti crypto stance, which is remarkable. Going forward however, Hong Kong may be combining its crypto-friendliness with strict compliance requirements for crypto companies to ensure that the industry is safe for both investors and the companies.