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Opinion: Hong Kong’s cryptocurrency retail investors must be better protected

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Opinion: Hong Kong’s cryptocurrency retail investors must be better protected
There have been official noises about investor education and protection. But it’s debatable whether greed can be legislated away when saturation marketing and social media influencers have so much more immediacy. Singapore tried and banned cryptocurrency promotions.
Hong Kong’s Securities and Futures Commission (SFC) has put up guard rails for retail investors but we still lack a cohesive education and protection ecosystem to underpin the regulation. Such a ecosystem would unify the police, SFC, the monetary and customs authorities, the cryptocurrency lobby, banks and, crucially, the public as citizen vigilantes.
A JPEX advertisement at an MTR station in Hong Kong earlier this year. Photo: Handout
Hong Kong’s average Joes are adept at spotting the hottest new cryptocurrency promotions, whether from banner ads in MTR stations or on social media, and finding the latest over-the-counter (OTC) cryptocurrency outlets – which, in the case of JPEX, neither the SFC nor the monetary or customs authorities appeared to have much, if any, jurisdiction over.

Regulators reportedly did not know exactly how many of such OTC outlets operate in Hong Kong. This is despite the police regularly disseminating text messages warning of email scams and the Hong Kong Monetary Authority’s anti-fraud task force.

In a borderless cryptocurrency world, real-time warnings are vital. Every cryptocurrency investor in Hong Kong should be encouraged to register with the agencies above. Ideally, this would be done through a one-stop, bilingual, user-friendly SFC website dedicated to digital asset investment.

Such a website should contain updated investor alerts, licence status lists, copies of the licences granted, the names of the directors and banks, lists of reported and known cryptocurrency scams via a “red flag list”, what can be said in promotional materials, and whistle-blower phone and email hotlines with guaranteed response times.

There should also be law firms, accountants and blockchain forensic analysis companies that can be instructed, and a retail and institutional investor crisis management checklist – for when investors realise they have been scammed, their wallets hacked or their data breached.

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The cryptocurrency scandal gripping Hong Kong

The cryptocurrency scandal gripping Hong Kong

Gullibility can also be weakened through bilingual education seminars by speakers in the Web3 ecosystem that are sponsored by authorities such as the SFC.

In a pseudonymous, decentralised cryptocurrency world, the public’s access to data for education and enforcement may have to be centralised if Hong Kong seeks to become a global cryptocurrency hub.

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High costs cloud Hong Kong’s crypto hub dream

A tough question is which is more important: an investor’s right to withdraw and redeem at will, or the maintenance of the exchange’s liquidity? These appear mutually exclusive. Sometimes, however, an exchange operating within the rules may have legitimate reasons to temporarily gate investor withdrawals that have nothing to do liquidity issues.

It was different with JPEX, which admitted to a liquidity problem. As the police and the SFC closed in, JPEX’s cynicism towards its clients went on full display. It effectively halted withdrawals by imposing a prohibitively high handling fee of over 90 per cent and started a process to turn the platform into a decentralised autonomous organisation with deferred dividends.

To retail investors with frozen funds, this was a coerced Ponzi scheme. Given that JPEX was based in Dubai, a centralised Hong Kong early warning system might have produced results as to the status and whereabouts of funds.

JPEX is accused of never intending to be regulated or licensed in Hong Kong and of ignoring the SFC’s enquiries – a charge it denies. While JPEX had been on the SFC’s radar since March last year and was placed on its alert list four months later, there seemed to be little the SFC could do except liaise with the police, which finally asked internet service providers to block the JPEX website last month.
JPEX remains unlicensed and its website has been blocked. Photo: Bloomberg

By June 1, 2024, Hong Kong-based cryptocurrency exchanges must apply for a licence or shut down. Perhaps the SFC should reserve the option of “regulatory sandboxes” in the meantime to test its requirements for virtual asset trading platforms and ensure compliance, before unleashing such platforms on an unsuspecting public.

While the JPEX scandal is the city’s largest case of financial fraud, it won’t derail Hong Kong’s cryptocurrency and Web3 ambitions, which are entrenched government objectives. With Hong Kong’s FinTech Week approaching, we can expect the government to reiterate its commitment to Web3 and to stress its ethical development.
It is better for the SFC to learn its cryptocurrency lessons sooner rather than later. The commission had the backing of Web3 players when it decided to disclose the list of applicants for virtual asset licensing and their status in the wake of the JPEX fallout. Now the real work of investor education begins.

Sanjeev Aaron Williams is a Hong Kong-based lawyer who writes on geopolitics and the digital economy

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Experts celebrate promising new breed of cryptocurrency: 'Not only promises efficiency …'

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Experts celebrate promising new breed of cryptocurrency: 'Not only promises efficiency …'

An up-and-coming player in the world of cryptocurrency is looking to revolutionize the industry through its unique processes that highlight sustainability.

According to Be3, cryptocurrency XRP, developed by Ripple Labs, could have a “transformative impact on both finance and environmental sustainability” thanks to its unique consensus mechanism that does not require mining and uses a negligible amount of energy even as it scales.

It generates a minuscule amount of pollutants per transaction while producing 1,110 pounds of electronic waste and impacting just over 8 cubic miles of natural resources.

This approach separates XRP from its contemporaries, which often rely on the notoriously power-hungry proof-of-work systems and hulking mining centers that can destabilize the grid.

Statistics provided by TRG Datacenters show that XRP is the second-most eco-friendly cryptocurrency behind IOTA, consuming just 0.0079 kilowatt-hours per transaction. Comparatively, bitcoin ranks last at a staggering 707 KWh per transaction.

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Furthermore, the cryptocurrency became the first major global blockchain to achieve carbon net zero by purchasing enough renewable energy to offset its minimal energy requirements, per the XRP Ledger.

Be3 also noted other features that make XRP an attractive option for institutions focused on environmental responsibility, as it takes just three to five seconds to settle at fractions of a cent per transaction.

It’s a welcome addition to a sector that desperately needs more sustainable options. A study by the International Monetary Fund found that crypto mines, in conjunction with artificial intelligence data centers, accounted for 2% of global electricity demand and 1% of carbon dioxide pollution in 2022.

The United Nations found that the bitcoin mining network used 173.42 terawatt-hours of electricity between 2020 and 2021, resulting in a carbon footprint equivalent to burning 84 billion pounds of coal. 

Coal and natural gas also supplied 66% of the energy for mining operations during this period, polluting the planet with planet-warming gases.

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Luckily, the sector has made significant strides in recent times in an effort to become more eco-friendly. 

Alephium, which utilizes a proof-of-work blockchain, has partnered with Gigatons to implement a proof-of-less-work consensus that is significantly more energy efficient. 

Meanwhile, Ethereum has transitioned to a proof-of-stake system that has cut its energy consumption by nearly 100%.

“In a world increasingly attentive to environmental impact, XRP’s innovative technology not only promises efficiency but also a greener future,” Be3 wrote.

Join our free newsletter for good news and useful tips, and don’t miss this cool list of easy ways to help yourself while helping the planet.

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ZIUM Launches to Revolutionize Instagram and Cryptocurrency Solutions

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ZIUM Launches to Revolutionize Instagram and Cryptocurrency Solutions

Zagreb, Croatia–(Newsfile Corp. – January 12, 2025) – ZIUM, a cutting-edge agency founded to tackle some of the most pressing challenges in social media and digital marketing, is now officially open for business. Specializing in Instagram username claims, account unbans, and cryptocurrency marketing, ZIUM has positioned itself as a trusted partner for individuals and businesses seeking innovative solutions in the digital age.

The agency operates at the intersection of technology, social media, and blockchain marketing, empowering clients to unlock their full potential online. With a dedicated team of experts and a results-driven approach, ZIUM is redefining the way people navigate the ever-changing online landscape.


ZIUM

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A New Era of Digital Problem Solving
ZIUM’s services address real-world challenges in today’s digital ecosystem. Instagram, one of the largest and most influential social platforms, has become a critical tool for personal branding, business promotion, and community engagement. However, issues such as unavailable usernames or unfair account suspensions can hinder growth and cause frustration. ZIUM steps in to provide solutions that are fast, efficient, and tailored to each client’s needs.

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Additionally, ZIUM excels in cryptocurrency marketing, offering projects and startups a strategic edge in the fast-paced blockchain industry. By combining deep knowledge of crypto trends with cutting-edge marketing strategies, the agency helps blockchain projects stand out in an increasingly crowded market.

Core Services Offered by ZIUM

  1. Instagram Username Claims
    In the crowded social media space, having the perfect Instagram username can make all the difference. Whether it’s for a brand, influencer, or business, ZIUM specializes in acquiring sought-after usernames to align with clients’ goals and identities. The agency handles the process from start to finish, ensuring a smooth and hassle-free experience.

  2. Instagram Account Unbans
    Account suspensions on Instagram can be devastating, especially for businesses and influencers relying on the platform for engagement and revenue. ZIUM offers expert account recovery services, helping clients navigate Instagram’s policies to regain access to their accounts quickly and effectively.

  3. Cryptocurrency Marketing
    The cryptocurrency space is highly competitive, and visibility is key. ZIUM provides end-to-end marketing strategies tailored to blockchain projects, ensuring they reach the right audience. From brand development to targeted campaigns, ZIUM helps crypto ventures grow and thrive in an ever-evolving market.

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Donald Trump Embraces Meme Coins—A Presidential First

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Donald Trump Embraces Meme Coins—A Presidential First

Donald Trump is making news once more, but this time it’s not for political reasons; it’s about cryptocurrency. As he prepares to return as the 47th President of the United States, Trump will become the first sitting president to own meme currencies, a decision that has stirred both enthusiasm and skepticism in the crypto community.

Trump: A Significant Crypto Portfolio

Recent sources claim that Trump’s crypto wallet consists largely of meme coins and is valued roughly $8 million. Among the assets are $1.5 million in a meme currency with Trump-themed design and $5.5 million in TROG tokens.

In addition, he has about 1.3 billion GUA coins, which amounts to nearly $400,000, and $167,000 in TRUMPIUS tokens. This is a first of its kind, where Trump becomes an oddity in the world of politics and cryptocurrency, considering his earlier reluctance towards digital assets.

From Skepticism To Support

Trump’s journey into the crypto world is notable. He had been a strong critic of Bitcoin and other cryptocurrencies, calling them scams. But that all changed in 2024 when he started publicly endorsing Bitcoin and speaking out for the right to own it. That’s a broader trend among politicians, who are increasingly recognizing the potential of cryptocurrencies and their growing popularity among voters.

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Trump’s financial success in the digital sphere was also aided by his venture into non-fungible tokens (NFTs) on Ethereum. Trump reportedly made a good living from these endeavors, and he currently owns roughly 496.77 ETH, which is worth about $1.6 million.

BTC is currently trading at $94,144. Chart: TradingView

Implications For Regulation

Many people are eager to see how Trump’s administration will regulate cryptocurrencies now that he is back in office. A possible change toward a more advantageous regulatory climate for digital assets is hinted at by the nomination of important individuals like David Sacks as “Crypto Czar” and Paul Atkins as SEC chair. This could result in more precise rules for investors and businesses involved in the cryptocurrency industry.

Trump

Donald Trump. Image: Ronda Churchill/Reuters

The policies by Trump are already changing market dynamics as everybody is anxiously awaiting them. During this time when Bitcoin hit a record high of $108k, while meme coins surged, analysts still feel that Trump could make the year 2025 a major turning point in cryptocurrencies.

Meme Coin Boom

The rise of Trump-owned meme coins is indicative of a broader cultural shift among younger investors who are fed up with established financial institutions. This combination of the political influence of Trump and the speculative nature of meme coins puts a scenario under which political events could significantly affect cryptocurrency markets. Thus, while the investors go about this, they are not ignorant of the volatility that is usually associated with meme coins.

Featured image from Fortanix, chart from TradingView

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