Hong Kong Police Launch International Hunt
Hong Kong authorities are intensifying efforts to capture the masterminds behind the JPEX cryptocurrency exchange scandal, which is being described as one of the city’s largest financial frauds. Despite 11 individuals having been detained for questioning, the leaders of JPEX remain elusive, prompting Hong Kong police to enlist the help of Interpol in their pursuit.
Massive Fallout and Countless Victims
As reported on September 23 by the South China Morning Post, more than 2,265 complaints have been filed by victims of the exchange, with estimated losses nearing a staggering $178 million (1.4 billion Hong Kong dollars). These complaints primarily revolve around difficulties in withdrawing cryptocurrency from the platform. Notably, on September 15, JPEX raised its withdrawal fees to 999 Tether.
High-Profile Figures Caught in the Net
Among those brought in for questioning are crypto influencer Joseph Lam Chok, who has sought to distance himself from the exchange publicly. Three employees of the JPEX Technical Support Company, along with two prominent YouTubers, Chan Wing-yee and Chu Ka-fai, who collectively boast over 200,000 followers, have also been arrested in connection with the scandal. Additionally, individuals such as Kwok Ho-lun, the company’s sole director, a restaurant director, and three celebrities who had previously endorsed JPEX are either sought for questioning or already in custody.
Ringleaders Remain at Large
Despite these arrests, Hong Kong authorities have not apprehended the ringleaders behind JPEX. The police have emphasized that the investigation is ongoing and anticipate further arrests in the near future.
International Cooperation and Site Blocking
In their quest for justice, local law enforcement has sought assistance from Interpol and other international enforcement agencies. Suspicious crypto transfers from the JPEX exchange have been identified, prompting these actions. Additionally, local telecommunications providers have been asked to block access to the exchange’s website.
A Rapid Unraveling
The JPEX scandal began to unravel on September 13 when Hong Kong’s financial regulator revealed it had received over 1,000 complaints about the unregistered crypto exchange platform, with reported losses exceeding $128 million (1 billion HK dollars). The exchange reacted by discontinuing several yield-bearing products and significantly increasing withdrawal fees to 999 USDT, blaming third-party market makers for “maliciously” freezing liquidity. It also claimed unfair treatment from regulatory bodies, including the Securities and Futures Commission (SFC), despite its failure to secure a virtual asset trading license.
JPEX’s Ambitious Claims
Founded in 2020, JPEX purported to be headquartered in Dubai and claimed licenses for crypto trading activities in the United States, Canada, and Australia. The exchange boasted oversight of approximately $2 billion in assets and aspired to secure a spot among the world’s top five crypto exchanges.