Home Cryptocurrency JPEX scandal masterminds still at large as 11 suspects taken into custody: Report

JPEX scandal masterminds still at large as 11 suspects taken into custody: Report

by Harry Garcia

The Hong Kong JPEX alleged crypto exchange scandal has shaken the city’s financial landscape, with authorities struggling to apprehend the masterminds behind what some are calling the largest financial fraud in the city’s history. Despite questioning 11 individuals in relation to the case, the main perpetrators remain at large.

According to a report from the South China Morning Post, the police have received over 2,265 complaints from victims of the exchange. The total estimated value of the fallout is around $178 million (1.4 billion Hong Kong dollars). The complaints stem from difficulties in withdrawing cryptocurrency from the platform. In a questionable move, the JPEX exchange raised its withdrawal fees to 999 USDT on September 15.

The list of individuals taken in for questioning includes crypto influencer Joseph Lam Chok, who has publicly distanced himself from the exchange. Three employees of the JPEX Technical Support Company, along with two YouTubers, Chan Wing-yee and Chu Ka-fai, have also been arrested. These YouTubers have a combined following of more than 200,000. Other individuals being sought or questioned include the company’s sole director Kwok Ho-lun, a restaurant director, and three celebrities who allegedly promoted JPEX in the past.

Despite these arrests, the Hong Kong authorities have stated that the ringleaders of the operation are still on the run. The police have indicated that the investigation is ongoing, and further arrests are expected in the near future. Local police have sought the help of Interpol and other international enforcement agencies after identifying suspicious crypto transfers from the JPEX exchange. They have also requested local telecommunications providers to block access to the exchange’s website.

During the Token2049 conference in Singapore on September 13, the JPEX team reportedly abandoned its corporate booth after six employees were arrested by Hong Kong police on fraud charges for operating an unlicensed crypto exchange.

The JPEX scandal came to light on September 13 when Hong Kong’s financial regulator announced that it had received over 1,000 complaints about the unregistered crypto exchange platform, with reported losses exceeding $128 million (HK$1 billion). The exchange later closed down several yield-bearing products and increased its withdrawal fees to 999 USDT, blaming their third-party market-makers for freezing liquidity maliciously.

At the time, JPEX claimed to have attempted to register with the relevant authorities and alleged “unfair” treatment from the SFC. However, in a statement on September 20, the SFC revealed that JPEX had been operating without a license for virtual asset trading.

JPEX, which claimed to be headquartered in Dubai and licensed for crypto trading activities in the US, Canada, and Australia, stated on its official website that it oversaw around $2 billion in assets. The exchange aimed to be among the top five crypto exchanges globally.

The Hong Kong JPEX alleged crypto exchange scandal has exposed the vulnerabilities and risks that exist within the cryptocurrency industry. As regulators work to tighten oversight, it serves as a reminder for investors to exercise caution and remain vigilant when engaging with digital assets.

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