Hong Kong's JPEX Crypto Exchange Scandal: $178 Million in Complaints, Key Suspects at Large
The ongoing JPEX crypto scandal in Hong Kong sees major players remain at large, drawing international attention with mounting complaints.
Tue, 26 Sep 2023, 01:10 am UTC
Hong Kong's JPEX crypto exchange, which some have dubbed the city's most significant financial deception, is in the spotlight with the key players still at large. Although 11 individuals have been detained and questioned, the primary orchestrators remain elusive.
A recent report by the South China Morning Post revealed that over 2,265 complaints have been filed against the JPEX exchange, pushing the financial implications of the case to an astonishing $178 million (equivalent to 1.4 billion Hong Kong dollars).
Victims primarily faced challenges in extracting cryptocurrency from the platform. On September 15, JPEX raised its withdrawal charges to an unexpected 999 Tether (USDT).
Among those taken in for inquiry is the notable crypto commentator, Joseph Lam Chok, who has frequently tried to disassociate himself from the exchange publicly. Additionally, three individuals from the JPEX Technical Support Company were arrested, along with social media personalities Chan Wing-yee and Chu Ka-fai. These two influencers jointly boast a following of over 200,000.
Other individuals linked to the ongoing investigations include JPEX's sole director, Kwok Ho-lun, a restaurant manager, and three famous figures who have previously endorsed JPEX.
Despite these developments, Hong Kong's law enforcement officials confirmed that the primary suspects are yet to be apprehended. They anticipate more arrests in the subsequent days.
In a bid to tighten the net, local police have sought assistance from Interpol and various global enforcement entities, tracing suspicious cryptocurrency transactions from the JPEX platform. To further restrict the exchange's activities, authorities have asked telecom companies to block the JPEX website.
The controversy garnered attention on September 13 during the Token2049 conference in Singapore. Following the arrest of six JPEX employees by Hong Kong police for fraudulent practices, the JPEX team abruptly vacated their corporate stand. Simultaneously, Hong Kong's finance watchdog alerted the public to over 1,000 complaints related to this unrecognized crypto exchange, highlighting losses exceeding $128 million.
Subsequently, JPEX ceased several of its high-return products and escalated its withdrawal fees, holding its external market partners accountable for intentionally halting funds. JPEX maintained that they had sought to register with appropriate agencies but faced unjust obstacles from regulatory units, most notably the Securities and Futures Commission (SFC). By September 20, the SFC confirmed that JPEX had been functioning without a necessary license.
On its official platform, JPEX asserts a Dubai-based headquarters and avows licensing in the United States, Canada, and Australia. Established in 2020, JPEX previously managed approximately $2 billion in assets, aspiring to rank among the top global crypto exchanges.
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