The Hong Kong police have apprehended six individuals in connection with the cryptocurrency trading platform JPEX, which shuttered its operations this week.
According to a South China Morning Post report, the authorities arrested four men and two women, including influencer Joseph Lam Chok, following 1,408 complaints of fraud related to JPEX. Local news outlets additionally reported that law enforcement seized evidence, including a laptop and a sum of cash. The estimated amount involved is approximately HK$1 billion (equivalent to $128 million).
Crypto Influencers Nabbed
Lam is a former lawyer who turned into the insurance brokerage field and commands a substantial Instagram following. According to the Insurance Authority’s database, Lam’s license as an individual insurance intermediary was suspended on July 4 this year.
Subsequently, Hong Kong’s Commercial Crime Bureau (CCB) conducted a raid at Lam’s office located in the Central Entertainment Building, following which plain-clothes officers escorted him out of the building and into an unmarked police vehicle. The report also suggested that the law enforcement officers confiscated containers filled with evidentiary materials, among them a plastic bag containing banknotes, from his office.
Alongside Lam, influencer Chan Wing-yee was also detained at the Central Police Station under suspicion of involvement in a conspiracy to commit fraud.
The officers also conducted a search at the office of an over-the-counter (OTC) virtual asset money changer located in Tsim Sha Tsui East. The case is currently under investigation, with the possibility of further arrests, as stated by the police.
The Securities and Futures Commission (SFC) asserted that JPEX had relied on deceptive statements made by key opinion leaders (KOLs), who are often paid promoters.
The SFC further elaborated that both KOLs and OTC shops had circulated false or “misleading” information on social media, implying that JPEX had applied for a Virtual Trading Platform (VATP) license in Hong Kong, either independently or in collaboration with a Hong Kong-listed company. In reality, no entity within the JPEX group had submitted any VATP license application to the SFC.
The commission has formally communicated its suspicions and concerns to the relevant KOLs and OTC shops, requesting them to discontinue the promotion of JPEX and its associated services and products.
JPEX, which has offices and units in Dubai, Australia, and the United States, ceased crypto transactions on its Hong Kong platform, citing “negative news” and claiming “unfair treatment by relevant institutions” that led to its partners freezing its funds.
The unraveling prompted JPEX to halt trading on its Earn Trading interface starting from September 18. Existing users can complete ongoing trades but are unable to initiate new trading transactions.