On September 13, the Hong Kong SFC issued a release titled, Warning statement on unregulated virtual asset trading platform, in which the regulator targeted the Dubai-headquartered cryptocurrency exchange, JPEX, specifically. 

“The SFC wishes to make it clear that no entity in the JPEX group is licensed by the SFC or has applied to the SFC for a licence to operate a VATP in Hong Kong”, reads the release.

The statement continues to point out “a number of suspicious features about the practices of JPEX”, including but not limited to:

• Claiming to have obtained licenses from overseas jurisdictions, despite not having done so. 
• Offering “very high returns” on certain products - with JPEX’ 21% APY savings product cited as an example.
• Reports of users unable to withdraw from the exchange, and even having their balances “reduced or altered”.
• False claims made regarding investment from a “Hong Kong listed company”.

The SFC’s release concluded with comments both warning users that they risk losing their entire portfolio if JPEX “ceases operation, collapses, is hacked or otherwise suffers from any misappropriation of assets” and that seeking “recourse against platforms that do not have a nexus with Hong Kong is likely to be difficult and legal remedies may not be available”.

In the wake of these comments, and the statement itself, it appears likely that the Hong Kong SFC may take action against the exchange in question.