An inquiry into a trading platform that has caught social media influencers and spurred criticism of a key regulator is the cause of the bitcoin disagreement that has broken out in Hong Kong.

The crisis, which occurred only three months into the new digital asset regime, indicates Hong Kong’s intention to establish a crypto hub won’t be easy to achieve. The market regulator and Hong Kong police will examine the most recent arrests related to the JPEX cryptocurrency platform, said John Lee, the city’s chief executive, at his weekly press conference on Tuesday.

Although leading bitcoin executives claim they anticipate a recovery in Asia, at least in Hong Kong, there is currently little indication of sizable investment plans.

Retail investors are only permitted to trade in a relatively small number of digital assets under the current framework, which was put in place in June. This restricts exchange options. The regulator in Hong Kong is committed to eradicating unethical behavior to safeguard investors and give firms clarity.

More than 1,400 complaints totaling HK$1 billion ($128 million) have reportedly been made against JPEX to the local authorities, according to Hong Kong police. After the SFC issued its warning, JPEX firmly declared that any action taken against the platform would hinder Hong Kong’s Web3 goal.

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