The brains behind Hong Kong’s alleged JPEX crypto exchange scandal, dubbed by some as the city’s most significant financial fraud, remain at large even though 11 individuals have already been brought in for questioning related to the case.
A report from South China Morning Post on September 23 states that the police have now accumulated over 2,265 complaints from the exchange’s victims, with the estimated financial damage hovering around $178 million (1.4 billion Hong Kong dollars). These complaints are primarily centered around issues with withdrawing cryptocurrency from the platform. On September 15, JPEX exchange notably increased its withdrawal fees to 999 Tether (USDT).
Among those reportedly detained for questioning are crypto influencer Joseph Lam Chok, who has continually tried to publicly sever ties with the exchange, and three employees from the JPEX Technical Support Company. Additionally, two YouTubers, Chan Wing-yee and Chu Ka-fai, with a combined following of over 200,000, have also been taken into custody regarding the scandal.
Despite these arrests, the masterminds of the scandal are still evading capture. Hong Kong authorities have stated that the investigation is ongoing, with more arrests anticipated soon. After noticing suspicious crypto transfers from the JPEX exchange, local police have enlisted the assistance of Interpol and other international law enforcement agencies. They have also requested local telecom providers to restrict access to the exchange’s website.
During the Token2049 conference in Singapore on September 13, the JPEX team reportedly deserted its corporate booth following the arrest of six employees by Hong Kong police on fraud charges related to operating an unlicensed crypto exchange. The JPEX scandal initially came to light on the same day when Hong Kong’s financial regulator disclosed receiving over 1,000 complaints about the unregistered crypto exchange platform, with reported losses exceeding $128 million (1 billion HK dollars).
Following these events, the exchange closed several of its yield-bearing products, hiked its withdrawal fees to 999 USDT, and accused its third-party market makers of “maliciously” freezing liquidity. Despite these allegations, JPEX maintained that it had tried to register with the relevant authorities and complained of “unfair” treatment from regulatory bodies, including the Securities and Futures Commission (SFC). On September 20, the SFC announced that JPEX had been operating without a virtual asset trading license.
As per the official website, JPEX, claiming to be based in Dubai, asserts to be licensed for crypto trading activities in the United States, Canada, and Australia. Established in 2020, JPEX professed to manage around $2 billion in assets and aspired to be ranked among the world’s top five crypto exchanges.
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