Hong Kong Police Arrest Eight in Connection with $152 Million Crypto Fraud at JPEX
Eight individuals have been arrested by Hong Kong police in connection with a suspected $152 million fraud at crypto exchange JPEX. The arrests were made following 1,641 complaints received by the police from individuals who were unable to recover their money from the exchange. In a press briefing, the police revealed that they conducted raids at twenty locations across the city, seizing cash, jewelry, luxury handbags, computers, and phones worth around HK$8 million.
JPEX’s Troubles Begin
JPEX’s troubles began when Hong Kong’s Securities and Futures Exchange Commission (SFC) released a statement stating that the exchange is not licensed to operate in Hong Kong. The SFC also accused JPEX of providing false information about licenses from foreign regulators, promoting non-existent business partnerships, and offering suspiciously high returns on its interest-bearing products.
Hong Kong police held a press conference on Tuesday afternoon after four men and four women were arrested on suspicion of fraud linked to the unlicensed cryptocurrency exchange platform JPEX.
Photos: Kyle Lam/HKFP. pic.twitter.com/61lomKWV87
— Hong Kong Free Press HKFP (@hkfp) September 19, 2023
JPEX faced a liquidity squeeze after its market makers froze its funds in response to the warning from the SFC. The exchange suspended its Earn program and increased withdrawal fees. Users reported high withdrawal fees, with some claiming a fee of 999 USDT for a maximum withdrawal of 1,000 USDT. JPEX stated that it would gradually adjust the withdrawal fees back to normal levels and restructure its operations.
Arrests Made
Among those arrested were social media personalities Chan Hoi-yee and Joseph Lam Chok, who actively promoted JPEX and owned and operated OTC cryptocurrency exchange shops in Hong Kong. Police raided their offices and OTC stores, as well as other branches linked to JPEX.
JPEX Under Scrutiny
JPEX has been on the SFC’s investor alert list since July 2022, warning people to be cautious when investing on unregulated platforms. Although JPEX claims its operating headquarters is in Dubai under the supervision of the Virtual Assets Regulatory Authority of Dubai (VARA), the SFC states that JPEX is not listed as a licensed virtual assets service provider by VARA.
Hot Take: Hong Kong Police Arrest Eight in $152 Million Crypto Fraud Case at JPEX
Hong Kong police have made eight arrests in connection with a suspected $152 million fraud at crypto exchange JPEX. The arrests came after numerous complaints were filed by individuals unable to retrieve their funds from the exchange. Hong Kong’s Securities and Futures Exchange Commission had previously warned about JPEX’s lack of licensing and false information provided by the exchange. The arrests include social media influencers who actively promoted JPEX. This case highlights the importance of conducting due diligence when dealing with cryptocurrency exchanges and investing in unregulated platforms. It also underscores the need for regulatory oversight to protect investors and maintain the integrity of the crypto industry.
Insa’s extensive background in the financial realm encompasses roles as a writer, trader, and personal finance coach. Her proficiency spans a wide spectrum, ranging from commodities and indices to forex and cryptocurrencies. Insa’s specialization lies in furnishing strategic investment advice tailored to the fintech investment niche.