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Hong Kong Police Pursue Crypto Exchange JPEX Masterminds Amidst $178 Million Fraud

2 mins
Updated by Bary Rahma
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In Brief

  • Hong Kong authorities are actively pursuing the masterminds behind the JPEX exchange, who orchestrated a $178 million crypto fraud.
  • The leaders remain unidentified, while efforts to recover misappropriated funds and bring those responsible to justice are ongoing.
  • This scandal is also expected to lead to stricter crypto regulations in Hong Kong, reflecting the growing need for enhanced oversight.
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The leader of the failed crypto exchange JPEX is evading Hong Kong authorities and is suspected to be in Australia. The police plan to seek Interpol’s assistance to apprehend the masterminds behind this rug-pull scheme.

These developments follow the recent arrest of 11 individuals connected to JPEX. The rug pull resulted in a staggering loss of $178 million, marking it as the most significant financial fraud case in the city’s history.

Hong Kong Police Investigates Crypto Exchange JPEX

At the beginning of this month, concerns arose when the Hong Kong Securities and Futures Commission disclosed that the exchange was unregistered in the country. Additionally, the exchange’s deregistration in Australia prompted numerous victims to file complaints with the police.

However, the principal figures behind the exchange remain unidentified. Reports suggest that the 11 individuals arrested are likely mid-level participants who may not comprehensively understand the scam’s magnitude.

Among those arrested and questioned are social media influencer Joseph Lam Chok, YouTubers Chan Wing-yee and Chu Ka-fai, and employees of JPEX Technical Support Company, which was later rebranded as Web 3.0 Technical Support.

In addition to these arrests, law enforcement interrogated celebrities, including Julian Cheung Chi-lam, Jacqueline Ch’ng Se Min, and Clement Chan Ting-bong, who were involved in promotional activities for the exchange.

A reliable source disclosed that authorities have successfully frozen some cryptocurrencies linked to the fraud. Nevertheless, efforts are ongoing to recover the funds and bring the individuals responsible for the scam to justice.

Meanwhile, Hong Kong police are actively seeking assistance from Interpol in their pursuit of the exchange’s leaders. They have also contacted major cryptocurrency exchanges to aid in tracking and reclaiming the misappropriated assets.

What Does This Mean for the Hong Kong Crypto Scene?

The implications of this incident for the crypto industry in Hong Kong are significant. Experts believe the Securities and Futures Commission may intensify its enforcement of new crypto regulations. The regulator has previously cautioned investors to use licensed cryptocurrency trading platforms exclusively.

Livio Weng, the COO of HashKey Group, pointed out that the incident underscores why the public must choose licensed financial institutions for their investment activities. For instance, HashKey is a licensed crypto trading service provider in Hong Kong.

“The Securities and Futures Commission (SFC) of Hong Kong has been intensifying its efforts to license and regulate the exchange industry in recent years. They have introduced comprehensive guidelines for the operation of trading platforms, spanning over 100 pages, with specific requirements regarding user fund security, protection of user rights, operational standards for exchanges, and business transparency,” Weng added.

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In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.

Oluwapelumi Adejumo
Oluwapelumi believes Bitcoin and blockchain technology have the potential to change the world for the better. He is an avid reader and began writing about crypto in 2020.