Hong Kong is cracking down on crypto money launderers in the wake of the $193 million JPEX scandal

The Hong Kong Customs and Excise Department is looking to tighten regulatory measures to address money laundering risks associated with cash-for-cryptocurrency stores, the South China Morning Post reported on October 21. This decision comes after the police arrested some shop owners in Hong Kong. In connection with the alleged $192.7 million fraud committed on the JPEX cryptocurrency exchange.

In Hong Kong, traditional money changers are supervised by the Customs and Excise Department. However, over-the-counter (OTC) cryptocurrency exchanges currently operate without a license or regulatory oversight. Some of these OTC shops promoted JPEX investment offerings, which the Securities and Futures Commission (SFC) deemed “too good to be true.”

Hong Kong regulators are reviewing options to plug regulatory loopholes exposed by the JPEX scandal, said Louise Ho Pui Chan, Customs and Excise Commissioner.