The Hong Kong government says the recent $165 million alleged scandal involving crypto exchange JPEX won’t stifle its Web3 vision for the region.

In a Nov. 2 keynote at Hong Kong Fintech Week, the region’s Secretary for Financial Services and the Treasury Christopher Hui said the saga hasn’t affected the government’s plan.

“We’ve been asked many times whether JPEX will affect our determination to grow the Web3 market — the answer is a clear ‘no.’”

Hui was referring to the financial scandal involving the Dubai-based exchange JPEX where over 2,500 Hong Kongers allege they were defrauded, prompting the Securities and Futures Commission (SFC) to warn that JPEX was promoting its services locally without a license.

Hong Kong said it would tighten its crypto regulations after JPEX’s alleged actions. Additionally, the SFC set up a task force with the police to deal with illicit crypto exchange activities and updated its policies on crypto sales and requirements.

Hui said “a lot of things are going on on the regulatory front” — part of the government’s future Web3 regulatory plans see the SFC issuing guidance on tokenized securities and the tokenization of SFC-authorized investment products.

Crypto regulations will also be expanded to cover buying and selling “beyond trades taking place on now-regulated trading platforms,” Hui said.

A “much sought after” joint stablecoin consultation by the Hong Kong Monetary Authority (HKMA) and the Financial Services and the Treasury Bureau is also set to drop soon, which will take feedback from a January HKMA discussion paper.

Reports earlier this year said the HKMA pressured banks to provide services to crypto companies in the region. Hui said the HKMA will consult the sector on guidance for banks providing crypto custodial services.