Hong Kong has been rocked by the JPEX scandal this month. Some media outlets are calling it one of the biggest fraud cases in the city’s history—with victims’ losses snowballing to more than $175 million.
Just days after media reports swirled in that ringleaders of the operation were on the run, Chris Tang Ping-Keung, the Secretary for Security of Hong Kong, has said that the city authorities will not rest until the people who fell prey to the JPEX crypto fraud are brought to justice.
Speaking at a press briefing on Wednesday, September 27, the security chief’s office said the Hong Kong police have launched a manhunt to nab the masterminds behind the JPEX scandal. Tang Ping-Keung revealed that the police has thus far arrested 12 suspects in connection with the alleged fraud at JPEX.
Furthermore, the Hong Kong police have confiscated cash to the tune of 8 million Hong Kong dollars (approx. $1 million). Additionally, they’ve seized assets totaling HK$77 million (about $9.9 million), which reportedly includes real estate and digital currency.
Tang said that the Hong Kong police are in pursuit of the leaders of the JPEX who orchestrated the scandal, defrauding more than 2,300 victims out of over $175 million. Hong Kong’s financial watchdog, the Securities and Futures Commission, alleges that operators of JPEX crypto exchange were running an unlicensed crypto platform and misleading investors.
As of September 23, local police in Hong Kong had received more than 2,200 complaints alleging fraud against JPEX. The alleged losses in the case have surged to an alarming HK$1.4 billion (around $178 million). Victims allege they were unable to withdraw their crypto assets after the platform suspiciously raised withdrawal fees to 999 Tether.
Among those arrested in the case are lawyer-turned influencer Joseph Lam Chok—who has since distanced himself from the crypto exchange—Youtubers Chan Wing-yee and Chu Ka-fai and three JPEX Technical Support Company employees. Meanwhile, masterminds behind the JPEX scandal are still evading police arrest. Hong Kong police have reportedly asked Interpol and other international enforcement agencies for help to catch the culprits.
It’s worth recalling that, earlier this month, JPEX abruptly suspended operations, citing “unfair treatment” by Hong Kong authorities. The exchange said it was facing a liquidity crisis after its partners “maliciously” froze its funds.
In light of the JPEX scandal, Hong Kong’s financial regulator has decided to reveal the names of all crypto firms seeking a license. While critics say the incident has exposed the vulnerabilities of the city’s open economy, others believe it is a positive sign that signals that “the SFC is prepared to act” against companies that fail to comply with the city’s virtual asset rules.
Notably, Hong Kong had rolled out a welcome mat for crypto firms this year—going so far as to push banks to work with them. However, there is an urgent need for a clear regulatory regime and more oversight, or else, traders will continue to fall victim to such scandals.
