The leaders of the JPEX crypto exchange, sought by Hong Kong police, remain at large. Authorities have now sought the assistance of Interpol to locate and apprehend them.
In Hong Kong’s JPEX, alleged crypto exchange scandal’s masterminds evaded authorities; 11 were questioned, but none were apprehended. Some refer to this scandal as the largest financial fraud ever witnessed in the city.
On September 23, the South China Morning Post reported 2,265 complaints to police from exchange victims. The estimated fallout value amounts to approximately $178 million (1.4 billion Hong Kong dollars).
The complaints seem linked to users’ difficulties when withdrawing cryptocurrency from the platform. On September 15, JPEX hiked withdrawal fees to a hefty 999 Tether, a notable move in the exchange’s fee structure.
— 梭教授说 (@hellosuoha) September 14, 2023
Reports indicate multiple apprehensions for questioning, including Joseph Lam Chok, a notable cryptocurrency community figure. Lam Chok has been actively trying to distance himself from the exchange involved in the investigation.
Police arrested 3 JPEX Tech Support employees and 2 YouTubers, Chan Wing-yee and Chu Ka-Fai, in a recent incident. Collectively, these YouTubers boast a following of over 200,000 individuals. Their arrests are connected to the ongoing scandal.
Kwok Ho-lun, the company’s sole director, and three celebrity endorsers were among those sought for questioning alongside a restaurant director.
The authorities in Hong Kong revealed that despite their efforts, the ringleaders of the operation are still at large. The police informed that they continue to investigate the matter and anticipate further arrests soon.
JPEX Crypto Scandal: International Pursuit & Regulatory Failures
The local police have sought assistance from Interpol and other international enforcement agencies. They have taken action upon identifying suspicious cryptocurrency transfers originating from the JPEX exchange. Additionally, the police have requested local telecommunications providers to block access to the exchange’s website.
On September 13, the JPEX crew quickly departed the booth at Token2049 in Singapore as Hong Kong authorities detained six workers. The employees face fraud charges for operating an unlicensed cryptocurrency exchange.
The Platinum sponsor, JPEX, abandoned their booth at #Token2049 on the second day. 👀
On a side note, their logo looks quite similar to FTX. Is that a sign? 🤔 pic.twitter.com/KZw9o5vNgF
— J O Y (@joyxspacelatte) September 14, 2023
Moreover, the JPEX scandal surfaced on September 13, as the Hong Kong regulator disclosed 1,000+ complaints on unregistered crypto exchanges. These claims alleged losses surpassing $128 million (or 1 billion HK dollars).
The exchange later closed down several of its yield-bearing products and raised its withdrawal fees to 999 USDT. It placed the blame on its third-party market makers for “maliciously” freezing liquidity. At that time, the company asserted that it had tried registering with the necessary authorities.
Furthermore, it highlighted perceived “unfair” treatment from regulatory bodies, including the Securities and Futures Commission (SFC). In a September 20 statement, the SFC revealed that JPEX had been operating without a license for virtual asset trading.
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JPEX, per its website, headquartered in Dubai, holds licenses for crypto trading in the USA, Canada, and Australia. In 2020, they discovered a $2B asset oversight, aiming for a top-five spot in global crypto exchanges.