JPEX: The Cryptocurrency Exchange Investigated for Alleged Fraud
JPEX, a cryptocurrency exchange based in Hong Kong, recently had to shut down its operations due to an ongoing investigation by the authorities into its alleged involvement in a major scandal.
The investigation was initiated following a warning from the Securities and Futures Commission (SFC), the financial regulator of Hong Kong. According to the SFC, JPEX was operating without the necessary license.
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The SFC has received over 2,000 complaints from customers, with estimated losses of more than 1.4 billion Hong Kong dollars (approximately 170 million euros).
Crypto Exchange Involved in “Biggest Fraud Case Ever”
Various media sources in Hong Kong have referred to this as the “biggest financial fraud case ever” in the city. Customers flooded the exchange with complaints after experiencing difficulties in withdrawing their cryptocurrencies. Suddenly, there were withdrawal fees of 999 USDT, or 940 euros.
The Hong Kong police have arrested 11 employees suspected of “conspiring to defraud.” There are also reports of the arrest of well-known influencers and YouTubers such as Joseph Lam Chok, Chan Wing-yee, and Chu Ka-fai, who are allegedly linked to the investigation.
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Some former spokespersons for JPEX, including Hong Kong actor Julian Cheung and actress Jacqueline Ch’ng, have distanced themselves from the trading platform.
However, the Hong Kong authorities state that the leaders of the operation are still at large. The local police have reportedly sought the assistance of Interpol and other international law enforcement agencies after identifying suspicious transfers taking place through JPEX.
Regulator Tightens Cryptocurrency Regulations
Hong Kong opened its doors to the cryptocurrency industry this summer, despite the overall ban in China. This came with the introduction of new regulations, which JPEX reportedly failed to comply with.
The company initially registered in 2019 but failed to renew its registration. According to the SFC, JPEX never had the intention to do so.
On September 25, the SFC announced that it will publish a list of all registered cryptocurrency exchanges in the country that have obtained the necessary licenses. This will help the public identify unregulated service providers. The SFC will also compile a list of suspicious cryptocurrency companies to facilitate their recognition by the public. These lists will be available on the regulator’s website.