Although 11 people have already been detained for questioning in connection with the JPEX suspected cryptocurrency exchange scandal, which some have dubbed the greatest monetary fraud ever to affect the city, the case’s masterminds remain at large.
The South China Morning Post reported on September 23 that authorities had now collected more than 2,265 complaints from exchange victims, with the overall financial cost of the aftermath estimated to be around $178 million (1.4 billion Hong Kong dollars).
The issues raised seem to be with the platform’s inability to withdraw cryptocurrency. The JPEX exchange increased its withdrawal costs on September 15 to 999 Tether.
Crypto influencer Joseph Lam Chok, who has taken repeated steps to publicly dissociate himself from the exchange, is currently on the list of individuals who have purportedly been detained for questioning.
In connection with the case, police have also detained two YouTube stars, Chan Wing-yee and Chu Ka-fai, who together have more than 200,000 followers. Three workers of the JPEX Technical Support Company have also been detained.
The company’s only director, Kwok Ho-lun, a restaurant manager, three famous people who allegedly once promoted JPEX in some way, and others are also sought after or detained for questioning.
The operation’s ringleaders, according to Hong Kong’s officials, are still at large. The police stated that their inquiry was ongoing and that it was anticipated that more arrests would be made soon.
After noticing questionable cryptocurrency transfers coming from the JPEX exchange, local authorities also requested assistance from Interpol and other international law enforcement organizations. Additionally, the police have asked that local telecom companies restrict access to the exchange’s website.
The JPEX crew allegedly left its corporate exhibit at the Token2049 conference in Singapore on September 13 after Hong Kong authorities detained six employees on suspicion of fraud for running an unauthorized cryptocurrency exchange.
On September 13, Hong Kong’s financial authority made public the fact that it had received more than 1,000 complaints about the unregistered cryptocurrency exchange platform, with allegations of losses totalling more than $128 million (1 billion HK dollars). This is when the JPEX issue first surfaced.
Later, the exchange shut down a number of its yield-bearing contracts and increased its withdrawal fees to 999 USDT, blaming the “maliciously” frozen liquidity on its third-party market makers.
At the time, it highlighted “unfair” treatment from regulatory organizations, such as the Securities and Futures Commission (SFC), and alleged that it tried to register with the appropriate authorities.
In a statement on September 20, the SFC stated that JPEX has been conducting virtual asset trading without a permit.
JPEX claims to have its headquarters in Dubai and states that it has a license to conduct cryptocurrency trading business in the United States, Canada, and Australia, according to the company’s official website. JPEX, which was founded in 2020, claimed to manage $2 billion in assets and stated that one of its major priorities was to rank among the top five cryptocurrency exchanges globally.