JPEX cryptocurrency scandal: Hong Kong’s MTR Corp removes outdated online ad for trading platform amid mounting criticism

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Hong Kong rail giant the MTR Corporation has removed an online post promoting unlicensed cryptocurrency trading platform JPEX following a Post inquiry, amid mounting criticism against its advertising policy. The growing cryptocurrency scandal centred on JPEX, already the city’s largest case of its kind and totalling HK$1.2 billion (US$154 million) in assets, on Wednesday also prompted a government body to warn the public of the high risk of virtual trading, citing a rising trend of young people engaged in such activities. An MTR spokesman on Tuesday night said a JPEX ad that appeared in a Facebook post had referenced an advertisement placed at the Hong Kong station from March to April in 2022. Related ads have not been placed in any station since June 2022. Comments from various social media discussion groups show users hitting out at the MTR Corp for promoting JPEX. “MTR is involved in this biggest scam, it should shoulder all the compensation,” an online user said in popular forum LIHKG. JPEX claims reach HK$1.2 billion in Hong Kong’s biggest-ever fraud case Police earlier on Tuesday said the case involved more than 1,641 investors. Eight people have also been arrested so far in investigations of alleged fraud at JPEX. At a joint press conference with police, the Securities and Futures Commission (SFC) also accused JPEX of ignoring rules under the new licensing regime for virtual asset trading platforms, which was implemented on June 1 this year. A one-year transition period was given to existing platforms to halt promotions and wind down their businesses if they have no intention of applying for a license, but the regulator’s licensing director Wong Lok-yan said JPEX instead went the other way to intensify sales and promotional activities during this period. SFC last week ordered shops and internet personalities to cease promoting the trading platform. But a Facebook post dated February 2022 for JPEX was still displayed in the ad section of the MTR’s page on Saturday. The advertisement was later removed following a Post inquiry on the same day. JCDecaux Transport, the advertising agency handling MTR station ads, said the advertisement in question “passed screening at that time based on the available laws”. “Thereafter, no further advertising booking from JPEX was accepted,” the agency said in a statement. Meanwhile, the Investor and Financial Education Council (IFEC) on Wednesday cited survey findings that showed more young people were engaged in trading virtual assets, warning of high risks. Council general manager Dora Li Yuen-chow urged the public to do proper research before committing to a trading platform, and to ensure it was licensed. She told a radio programme that the latest annual study on financial literacy of residents, conducted by the council in April, found 6 per cent of 1,000 people surveyed had invested in virtual assets in the past year – a significant rise from 1 per cent in 2019. She added that interest was most prominent in youngsters aged 18 to 29, with 15 per cent of the age group revealing they had made investments in the past year, while 20 per cent indicated they had plans to do so in the coming 12 months. “Our research also found around 75 per cent of respondents said they wanted to make such investments because they were seeking short-term returns, and were worried they would miss the opportunity if they did not act fast,” she said. “We will continue to educate the public … to help them understand the risks.” JPEX fallout: Hong Kong leader warns trade should only be on licensed platforms Accountancy lawmaker Edmund Wong Chun-sek said on the same programme that the original intention of the one-year transition for platforms to apply for a licence was to give the industry time to sort out matters, and that the grace period was not for operators to use it as a grey area to commit fraud. JPEX issued a statement on Tuesday night, saying it “sternly” refuted the “malicious accusation” by the SFC. It insisted it would continue to operate.

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