After the Hong Kong Securities and Futures Commission (SFC) had already launched an investigation into the crypto trading platform JPEX, arrests have now been made – including some well-known influencers.
• Securities and Futures Commission (SFC) in Hong Kong has opened an investigation into JPEX
• Eleven people, including well-known influencers, were arrested
• JPEX justifies itself
In mid-September this year, the first allegations of fraud against the Dubai-based cryptocurrency trading platform JPEX began making the rounds. Hong Kong police are now investigating the case.
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Hong Kong explores influencer-backed crypto trading platform
Investors had complained about losses totaling 1.3 billion Hong Kong dollars – more than 2,000 people had filed complaints. As the BBD reports, citing the police, the complainants are said to have been inexperienced investors who were hoping for high returns. The exchange not only advertised itself through well-known influencers, but also in the Hong Kong subway and on huge billboards around the city.
Eleven people, including popular influencers, are now said to have been arrested, writes BBC. One of them is Joseph Lam, a former lawyer and insurance agent who describes himself as Hong Kong’s “Trolling King” on Instagram. Chen Yee, a YouTube star with around 200,000 subscribers, was also apparently arrested. Local media reports that it could be one of Hong Kong’s biggest fraud cases.
No licenses for trading cryptos?
According to its website, JPEX is licensed to facilitate trading of digital assets in the United States, Canada and Australia. The website’s “About Us” section shows blurry images of what appear to be licenses.
However, Hong Kong’s Securities and Futures Commission (SFC) recently revealed that JPEX was operating without a license to trade virtual assets. The crypto exchange then justified itself by saying that it had “tried to comply with the local requirement that came into force in June this year”, but its efforts were “rebuffed or circumvented with official rhetoric” by the Commission, the BBC continues . The crypto exchange also recently said it was working to resolve a “liquidity crunch” after some users complained that they were unable to withdraw their funds.
Meanwhile, trading activities on JPEX are said to have stopped following the arrests. Hong Kong authorities are expected to block internet access to the website. The supervisory authorities would “monitor the situation very closely and ensure that investors are adequately protected,” BBC quoted Hong Kong Prime Minister John Lee as saying. “This incident highlights the importance that if investors want to invest in virtual assets, they must invest on licensed platforms.”
Hong Kong has required virtual asset trading platforms to be licensed by the SFC since early June this year. The government is working to increase investor education so that the public can better understand the risks and regulation of platforms, writes BBC.
Drama about JPEX
A recent check of JPEX’s Hong Kong address reportedly revealed that the premises were occupied by a co-working company. The crypto trading platform cannot be found in their office in Taiwan either. The premises are empty.
Among others, the influencer Nine Chen also promoted JPEX. “After learning about the JPEX incident, I wanted to understand the situation, but at present I cannot contact the relevant people at JPEX,” Cryptoscene quoted the Taiwanese celebrity as saying. However, he is available to cooperate with the authorities.
Editorial team finanzen.net