The teal-and-white advertisements of cryptocurrency group JPEX, or Japan Exchange, were inescapable in Hong Kong last year on building walls, taxis and trams. The company’s slogan “investment: more than just stocks”, was advertised for weeks on a massive billboard in the centre of the city’s financial district.
Months later, JPEX’s name is prominent for a different reason: Hong Kong police have opened an investigation into alleged fraud and arrested JPEX staff, while the city’s regulator, the Securities and Futures Commission, has accused the company of misleading investors.
The investigation into the exchange is testing Hong Kong’s commitment to a rigorous but crypto-friendly regime. Once home base to major crypto companies including Sam Bankman-Fried’s FTX and Crypto.com, the territory launched a new licensing regime in June, allowing retail trading in an attempt to cement its top position as a trading hub for digital assets.