Former Lawyer and Crypto Influencer Joseph Lam Arrested in Connection with JPEX
Hong Kong Police have apprehended Joseph Lam, a former lawyer and crypto influencer, for his alleged association with troubled cryptocurrency exchange JPEX. Lam was arrested on Monday, September 18. The arrest comes amidst an ongoing investigation into JPEX by Hong Kong authorities following its liquidity crunch.
The police raided Lam’s office and seized boxes of evidence linking him to JPEX. Lam had previously informed his Instagram followers that he visited the police and provided them with information about the crypto platform. He also urged those affected by JPEX’s liquidity crunch to report their losses to a police hotline.
JPEX and Influencers Accused of Promoting Unregistered Products
The investigation into JPEX was initiated by the Securities and Futures Commission (SFC) of Hong Kong. The SFC warned that the exchange had illegally promoted its products and services using social media influencers. It further alleged that JPEX and its influencers falsely presented the platform as a registered exchange in Hong Kong. Investors were cautioned to be wary of misleading investment opportunities.
JPEX Suspends Operations Due to Liquidity Challenges
In response to the SFC’s investigation, JPEX has halted trading activities on its platform. The exchange cited liquidity issues with third-party market makers as the reason for suspending operations. It claimed that these market makers had maliciously frozen funds, restricting liquidity and increasing operating costs.
JPEX has increased withdrawal fees temporarily and announced plans to delist all transactions from its Earn Trading interface. While existing Earn orders will continue, users can no longer place new orders. The exchange intends to readjust fees once the situation stabilizes.
Hong Kong police have received over 83 complaints about JPEX, with assets worth $4.3 million involved. Users have reported difficulties withdrawing funds, as large sums are being held back as processing fees.
Hot Take: Crypto Influencers Beware
The arrest of Joseph Lam and the investigation into JPEX serve as a warning to crypto influencers and investors alike. It highlights the need for caution when promoting or investing in cryptocurrency platforms. Authorities are cracking down on illegal activities and misleading practices in the crypto space, and individuals found to be associated with such activities may face legal consequences.
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