The Hong Kong Securities and Futures Commission (SFC) recently published a statement accusing JPEX of actively pushing its services and products to Hong Kong residents.
Hong Kong authorities arrested six people in connection with the embattled crypto exchange JPEX, including crypto influencers Joseph Lam (Lin Zuo) and Chan Wing-yee.
Four men and two women have been arrested, after Hong Kong police received over 1,400 calls complaining of fraud at JPEX.
Hong Kong police reportedly arrested Lam, also known as "jolamchok" on Instagram, and raided his office, seizing boxes of evidence, including a plastic bag holding cash.
The Hong Kong Securities and Futures Commission (SFC) recently published a statement accusing JPEX of actively pushing its services and products to Hong Kong residents via online influencers and over-the-counter money changers.
Lam is reported to have introduced crypto "schemes" to a cryptocurrency investment chat group, encouraging one alleged victim, Miss Chen, to invest $100,000 Hong Kong dollars ($12,800) in cryptocurrencies.
JPEX has blamed the liquidity crisis on regulators and "third-party market makers." The exchange reduced the withdrawal limit to $1,000 and raised the processing charge to $975.
The company claims it will recover liquidity and adjust withdrawal fees back to normal levels.
The arrest of Lam and the ongoing investigation into JPEX have sparked widespread interest. The amount of money at stake was initially estimated to be around HK$34 million (roughly $4.35 million), but has now been estimated at “about HK$1 billion ($128 million).”
Currently, there are only two licensed platforms in Hong Kong. If a licensed platform declares bankruptcy, the customer can receive up to HK$500,000. Although digital asset trading platforms are not illegal, JPEX is not on the licensed list and customers are not protected.
The SFC has announced that it will alert investors about unlicensed trading platforms and their advertisements in the future, and investors should also check the SFC's list of licensed trading platforms before making investments.
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