Hong Kong authorities could give regulators more powers to tackle crypto fraud after the watchdog failed to shut down an unauthorized platform at the center of an alleged HK$148 million (US$19 million) fraud Hong Kong city leaders have said that
Chief Executive John Lee Kachiu said on Tuesday that the government would review related legislation, a day after lawmakers criticized the Securities and Futures Commission (SFC) over its handling of the incident and called on the government to close loopholes in the law. Stated.
“If there is a need to strengthen our laws in this area, or if there is room for improvement in the transparency of the information we publish, we will actively consider it,” he said before the weekly executive board meeting. Stated. “We will also request the relevant bureaus and departments to advance their efforts in these areas.”
Hong Kong man who lost HK$148 million in crypto fraud says public warning was too late
Hong Kong man who lost HK$148 million in crypto fraud says public warning was too late
Mr Lee said the government would consider giving further powers to regulators if necessary, and the SFC could now discuss what steps it could take, including by leveraging laws targeting money laundering. He added that he would consider it.
Police said on Monday that an investigation that began on Saturday resulted in 145 residents claiming they were asked to invest in the cryptocurrency platform Hounax and lost about HK$148 million.
Lawmakers criticized loopholes in the law that prevent watchdogs from taking enforcement action against unauthorized platforms and accused regulators of taking too long to warn the public.
![Chief Executive John Lee says the public should only trade on licensed platforms. Photo: Sun Yeung](https://cdn.i-scmp.com/sites/default/files/d8/images/canvas/2023/11/28/cbb84405-f080-45dd-88ff-82ae5fd500f0_47c8c456.jpg)
The SFC rejected suggestions that the incident reflected “serious deficiencies” in its surveillance operations, saying it needed time to investigate the incident.
“This platform is unregulated and not licensed by the SFC,” a spokesperson for the regulator said. “Therefore, SFC does not have the authority to suspend operations.”
Mr Lee said the public should only trade on authorized platforms and authorities should provide information quickly and in a transparent manner. Investor education also needs to be strengthened, he added.
He added: “We would like to emphasize that we must use all available methods to protect the interests of investors and to combat any platforms or websites that contain unauthorized, illegal or fraudulent elements.” said.
The Hounax platform allegedly defrauded 131 Hong Kongers of approximately HK$120 million.
The Hounax platform allegedly defrauded 131 Hong Kongers of approximately HK$120 million.
The latest lawsuit follows a scandal centered on the JPEX virtual currency exchange, which has claimed more than 2,500 victims and caused losses of more than HK$1.5 billion.
The scandal, which broke in September, is the biggest financial fraud case in Hong Kong’s history and exposed flaws in the regulatory system as the city seeks to transform into a crypto asset hub.
Police said they found some connection between the alleged fraud involving Hounax and the JPEX incident.
Hornax, which began operations this year and appears to be targeting local investors, claimed to be run by a Singaporean company.