Hong Kong's Alleged Crypto Scandal: Over $178M in Damages and Culprits Still at Large
Summary:
The architects behind the Hong Kong's alleged crypto exchange scandal, JPEX, continue to evade capture. Over 2,265 victims have lodged complaints, with damages estimated at $178m. Prompted by issues in digital currency withdrawal, among those reportedly detained for questioning include crypto advocate Joseph Lam Chok and three employees from JPEX Technical Support Company. As law enforcement continues their search, Interpol and other international enforcement agencies have been engaged to trace dubious crypto transactions linked to JPEX. The scandal first came to light on September 13 when over 1,000 complaints surfaced against the unlicensed crypto exchange and alleged losses of over $128m.
In an unprecedented financial scandal, the architects of a supposed cyber-currency exchange in Hong Kong, JPEX, managed to dodge capture even with 11 persons of interest already undergoing questioning. A recent reports from South China Morning Post on September 23 states that over 2,265 individuals have reported grievances to the law enforcement pertaining to the exchange, estimating the overall loss to be around $178 million or 1.4 billion Hong Kong dollars. These grievances seem to stem from issues in withdrawing digital currency from the platform, with JPEX hiking its withdrawal fees to 999 USDT on September 15.
Among those reportedly detained for interrogation is the crypto advocate Joseph Lam Chok, who's taken pains to separate himself publicly from the exchange. Alongside him, three employees from JPEX Technical Support Company, two Youtubers with a combined following exceeding 200,000, Chan Wing-yee and Chu Ka-fai, are also under custody. The company's only director Kwok Ho-lun, a restaurant director, and three celebrities alleged to have endorsed JPEX are also being sought or interviewed. However, authorities in Hong Kong confirmed the kingpins of the scheme remain at large, but the search continues with more potential arrests looming.
Local law enforcement is enlisting the assistance of Interpol and other international bodies in the wake of dubious crypto transactions identified emanating from the JPEX exchange, and have urged local telecoms to block the exchange's website. Following arrests of six employees by Hong Kong police on allegations of fraud relating to running an unsanctioned crypto exchange during the Token2049 conference in Singapore, the JPEX team vacated its corporate booth.
The issues surrounding JPEX first garnered attention on September 13 when Hong Kong's finance watchdog alerted the community of over 1,000 complaints against the unauthorized cyber currency exchange, noting losses exceeding $128 million. Soon after, the exchange ceased a few of its interest-yielding products and raised its withdrawal fees to 999 USDT, shifting blame onto its third-party market-makers for supposedly freezing liquidity maliciously. The company assert at that time that they had made an effort to acquire the necessary licensing from pertinent bodies, and accused the SFC of biased practices. The SFC, in a statement on September 20, disclosed that JPEX operated its virtual asset trading without licensing. The official site suggests the JPEX headquarters is in Dubai, with licensing for crypto commerce in the United States, Canada, and Australia. JPEX, initiated in 2020, held approximately $2 billion in assets and aimed to place among the top five worldwide crypto exchanges.
Published At
9/25/2023 2:42:07 AM
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