The Hong Kong government remains committed to its Web3 vision despite a recent crypto exchange scandal involving JPEX. Hong Kong's Secretary for Financial Services and the Treasury, Christopher Hui, stated that the scandal will not affect their determination to grow the Web3 market.


The Hong Kong government has reaffirmed its commitment to the Web3 vision for the region, despite the recent $165 million scandal involving the crypto exchange JPEX. During a keynote at Hong Kong Fintech Week on November 2, Christopher Hui, the Secretary for Financial Services and the Treasury, emphasized that the JPEX saga has not deterred the government's plan to foster the growth of the Web3 market.


The JPEX scandal involved allegations of defrauding 2,500 local residents and prompted the Hong Kong Securities and Futures Commission (SFC) to issue warnings about JPEX operating locally without the necessary licenses. In response, Hong Kong has announced its intention to strengthen its crypto regulations. The SFC has also established a task force in collaboration with the police to address illicit activities related to crypto exchanges, and it has updated its policies concerning crypto sales and requirements.


Hui revealed that significant developments are taking place on the regulatory front as part of the government's broader Web3 regulatory framework. The SFC plans to issue guidance on tokenized securities and the tokenization of SFC-authorized investment products.


Crypto regulations will be extended to cover transactions that occur "beyond trades taking place on now-regulated trading platforms," according to Hui. In addition, a "much-sought-after" joint consultation on stablecoins will be launched by the Hong Kong Monetary Authority (HKMA), the Financial Services Department, and the Treasury Bureau. This consultation will take into account feedback received from a January discussion paper published by the HKMA.


Earlier this year, reports indicated that the HKMA had pressured banks to provide services to crypto companies in the region. Hui announced that the HKMA plans to consult the sector on guidance for "banks providing digital asset custodial services," further underscoring the government's commitment to advancing the Web3 vision for Hong Kong.


(JESSE COGHLAN, COINTELEGRAPH, 2023)