Despite the scandals, the grace period of the Crypto exchange in Hong Kong remains unchanged

Despite recent scandals, a one-year grace period remains in place for cryptocurrency exchanges operating in Hong Kong.

In the year On November 27, local news reported that Hong Kong Securities and Futures Commission CEO Julia Ling said, “Although the grace period ends tomorrow, fraud will still occur, so there is no proposal to improve the grace period and other measures for the time being.”

Under new regulations introduced in June, crypto exchanges operating in Hong Kong must apply for a virtual asset service provider (VASP) license from the city's Securities and Futures Commission by June 2024 or face deregistration. However, unregistered exchanges can operate in the city during the temporary transition period.

Recently, the Special Administrative Region has been rocked by several crypto scandals. In September, Hong Kong crypto exchange JPEX collapsed after 66 arrests and 1.6 billion Hong Kong dollars ($205 million) in losses over an unlicensed Ponzi scheme at the time.

In the year On November 25, Hounax, another unlicensed crypto exchange, reportedly defrauded 131 residents out of 120 million HKD ($15.4 million) in another Ponzi scheme. Hong Kong Police Commercial Crime Bureau Superintendent Chan Waiqi explained that scammers pretend to be investment professionals and promise users huge profits. Later when users tried to withdraw the money, they were unable to do so.

On November 27, Cointelegraph reported that the HKVAEX exchange, which is connected to Binance, is still trying to apply for a license in Hong Kong. Earlier this month, BC Technology Group, owner of Hong Kong crypto exchange OSL, received a $90 million investment from blockchain company BGX.

Related: Binance-linked HKVAEX is still preparing to apply for a license in Hong Kong.