Litigation

Just three months.  That’s how long it has taken for the Securities and Futures Commission (SFC) to publicly name and shame a virtual asset (VA) exchange known as “JPEX” for potential breaches of the new licensing regime that commenced on 1 June 2023.The warning accuses JPEX of committing the criminal offence of actively marketing its products and services to the Hong Kong public without a licence.  The warning also takes aim at media influencers, “key opinion leaders” and over-the-counter (OTC) shops for facilitating said marketing.  Enforcement for non-compliance with the new Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615 of the Laws of Hong Kong (AMLO) regime has commenced while many exchanges are still busy preparing applications and before any before a licence under the AMLO has been granted to any VA exchange.In this article, we summarise why JPEX has been issued with a warning and the potential pitfalls for the many, compliance focused, VA exchanges that are in the process of, or considering, applying for a licence in Hong Kong, and those wishing to support and partner with them.