The cryptocurrency landscape in Hong Kong has experienced a notable shift in sentiment after a major exchange scandal that unfolded last month. According to early findings from a survey conducted by the Hong Kong University of Science and Technology (HKUST), attitudes towards virtual assets have become more negative.
The business school’s survey aimed to gauge the public perceptions of virtual assets and understand experiences, attitudes, and desired regulations around crypto investing. Over 5,700 adults participated in the first phase from April to May 2023.
So far, more than 2,200 respondents have participated in the follow-up survey, which started on September 28 and will end on October 20. While the full results are forthcoming, the preliminary findings are telling.
The preliminary results indicate that 41% of respondents now prefer not to hold cryptocurrency, marking a 12 percentage point increase compared to the earlier survey conducted in April-May. On the other hand, only 20% expressed an interest in owning cryptocurrencies in the future, a 5-point drop from the previous results.
This notable change in sentiment coincides with the recent revelation of a major cryptocurrency exchange scandal – the JPEX crypto exchange case. This fraud case has gained significant attention over the last two months, and it appears that it has impacted public opinion as awareness increased.
In the announcement accompanying the survey results, HKUST’s Associate Dean Allen Huang noted that “the recent financial incident has brought more public attention to the cryptocurrency industry, resulting in a more conservative investment appetite of late.”
In September 2023, authorities issued a public warning against JPEX after months of investigation and allegations of fraudulent activities involving over $166 million. JPEX subsequently suspended withdrawals and trading activities, citing technical issues. Since then, Hong Kong police have arrested more than four individuals connected to the case and have issued warrants for more.
In response to these developments, regulators in Hong Kong established a joint crypto enforcement working group in October to crack down on illicit crypto trading activities.
Professor Huang also noted the pivotal role crypto assets play in Hong Kong’s development strategy and emphasized the need for educational initiatives to raise awareness of the risks and potential associated with cryptocurrency adoption in the region.
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