A social media influencer from Hong Kong, Joseph Lam (Lin Zuo), known as “jolamchok” on Instagram, has been arrested following an investigation into the liquidity crisis of cryptocurrency exchange JPEX, which linked him to the incident, according to a report by South China Morning Post. The report also indicated that the police raided Lam’s office, confiscating boxes of evidence, including a bag of banknotes.
The Securities and Futures Commission of Hong Kong recently accused JPEX of actively promoting its services and products to the Hong Kong public through online celebrities and over-the-counter money changers, as per a local report. Another unconfirmed report alleged that Lin Zuo presented “schemes” to a cryptocurrency investment chat group. A member of the group, Miss Chen, reportedly invested 100,000 Hong Kong dollars ($12,800) in crypto after being persuaded by Lam.
Although Lam did not respond immediately to Cointelegraph’s request for comment on the accusations, the report stated:
“He (Lin Zuo) from time to time claimed in the group that people kept looking for him to “pay money,” threatened that “the amount of money on these two days is five times the usual.‘”
On September 17, Lam shared a news article claiming he “was not hit in the JPEX incident” and posted a caption saying, “Whatever doesn’t kill you makes you stronger.” This was followed by Zuo’s visit to the police with his lawyers to provide necessary information.
JPEX attributed the liquidity crisis to regulators and “third-party market makers,” which led to increased withdrawal fees and suspension of certain operations. JPEX stated in a release, “We promise to recover liquidity from third-party market makers as soon as possible and gradually adjust the withdrawal fees back to normal levels,” adding that details would be announced after negotiations concluded.
A recent Bitfinex report revealed that the crypto industry experienced $55 billion in capital outflows in August, impacting not only Bitcoin but also Ether and stablecoin liquidity.
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