Hong Kong police have arrested six individuals in connection with the cryptocurrency trading platform JPEX, which had its licenses suspended. The arrests follow 1,408 complaints of fraud against JPEX, with estimated losses of around HK$1 billion (approximately US$128 million).
JPEX, which had operations in multiple countries, halted cryptocurrency transactions in Hong Kong, citing “negative news” and challenges from relevant institutions. This move came shortly after the Hong Kong Securities and Futures Commission (SFC) had named JPEX for operating without a license and misleading investors.
Despite the regulatory challenges, experts believe that the SFC’s actions demonstrate Hong Kong’s commitment to regulating virtual assets. The city introduced regulations to facilitate retail investment in cryptocurrencies three months earlier.
JPEX had advertised extensively in Hong Kong, featuring local celebrities in its billboards and using mass media advertisements in public areas. These actions had raised concerns about the potential ripple effect and the need for regulatory intervention.
However, recovering clients’ assets may prove challenging, as it is unclear what business presence JPEX has in Hong Kong. The company search reveals limited information about its registration.
The case also involves influencers, with the SFC highlighting that key opinion leaders (KOLs) had made false or misleading statements about JPEX. The SFC has requested these KOLs to cease promoting JPEX and its services.
Complaints from victims have continued to rise, with 1,408 cases reported by the police, involving approximately HK$1 billion in losses. The victims have faced difficulties withdrawing their investments, with high fees involved.
In response to the situation, a member of Hong Kong’s Legislative Council is in contact with numerous victims, and concerns about investor confidence have emerged.
The JPEX case highlights the regulatory challenges faced by cryptocurrency trading platforms and the importance of enforcement to protect investors.
By FCCT Editorial Team
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