Public Confidence in Crypto Wanes in Hong Kong Amid JPEX Scandal
The development of cryptocurrency in Hong Kong has been dented in terms of public sentiment following the JPEX cryptocurrency exchange scandal, according to a recent survey conducted by the Hong Kong University of Science and Technology’s (HKUST) business school.
A two-phase survey methodology
The survey, the preliminary results of which were disclosed by the business school on Tuesday, aimed to gauge how public attitudes toward virtual assets had been affected by the JPEX scandal, which rocked the crypto community within the Chinese autonomous territory.
While the survey is set to conclude on October 20, the preliminary findings have already revealed a noteworthy shift in public perception. Notably, 41% of respondents expressed a preference not to hold virtual assets, marking a 12-percentage-point increase from the earlier study conducted in May.
Moreover, only 20% of respondents indicated a desire to hold virtual assets in the future, reflecting a five-percentage-point decrease compared to the previous survey. These findings suggest a growing skepticism among Hong Kong’s populace regarding the cryptocurrency industry.
Post-JPEX public sentiment
The initial survey involved 5,700 participants aged 18 and above and was conducted between April 24 and May 23. Phase two of the survey commenced on September 28, approximately 11 days after the allegations against JPEX came to light. The results were compared to a similar survey conducted between April and May to assess the evolving sentiment. Between September 28 and October 5, phase two of the survey had compiled responses from 2,200 individuals.
HKUST acknowledged that the second survey occurred in the “aftermath of an alleged financial fraud” involving a cryptocurrency platform but refrained from directly naming JPEX in the report.
Professor Allen Huang, Associate Dean of HKUST’s business school, attributed the shift in sentiment to the recent financial scandal, which thrust the cryptocurrency industry into the spotlight. This heightened attention has led to a “more conservative investment appetite” among the public. He emphasized the need for greater educational initiatives to enhance public awareness and understanding of the risks and potential of this emerging field.
HKUST’s business school stated that the survey’s primary objective was to assess the attitudes and viewpoints of Hong Kong’s residents regarding virtual asset investments, considering their experiences, intentions, and the regulatory safeguards in place.
JPEX fallout
The JPEX scandal, which allegedly involved a $166 million fraud scheme, unfolded over several months before Hong Kong authorities publicly announced their investigation into the exchange. It forced local regulators to reassess the soundness of crypto trading-related regulatory measures applied within the Chinese autonomous territory.
That reassessment led to regulators concluding that efforts needed to be intensified to combat unregulated platforms operating within Hong Kong. In response to the JPEX saga, the Hong Kong Police Force and the Securities and Futures Commission (SFC) established a cryptocurrency-focused working group earlier this month to combat illicit activities on cryptocurrency exchanges.
The evolving sentiment in Hong Kong reflects the broader challenges and concerns surrounding the cryptocurrency industry. As regulatory scrutiny increases and major incidents like the JPEX scandal come to light, it’s clear that fostering public trust and understanding is a pressing priority for crypto businesses and the broader crypto community.
