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Crypto Fraudsters Arrested In Hong Kong, Over A Billion Dollars In Assets Frozen

Hong Kong authorities detained 8 individuals in connection with the crypto platform JPEX on charges of conspiracy to defraud

HONG KONG — Hong Kong authorities detained eight individuals in connection with the cryptocurrency platform JPEX on charges of conspiracy to defraud.

The police disclosed that they had been inundated with 1,641 complaints regarding JPEX, with users alleging their inability to access their funds on the platform.

The total assets in question are estimated to be around HK$1.19 billion ($152 million), The Block reported.

This incident underscores the importance of regulatory clarity and oversight in the rapidly evolving digital asset space. Such topics are expected to be at the forefront of discussions at Zenger News’s Future of Digital Assets conference on Nov. 14, where industry experts will delve into the challenges and opportunities in the crypto realm.

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Hong Kong police display seized cash and other items at a press conference on September 19, 2023, after the arrests of eight people with ties to cryptocurrency platform JPEX. The arrests were made after authorities received more than 1,400 reports from potential victims who claimed to have lost around 128 million USD on troubled cryptocurrency exchange JPEX. HOLMES CHAN/AFP VIA GETTY IMAGES.

During the operation, named “tieguan” or “iron gate,” law enforcement officials conducted searches at 20 sites across the city, confiscating items valued at approximately HK$8 million, including cash, jewelry, and electronic devices. The police have also frozen assets amounting to HK$15 million linked to the arrested individuals and are contemplating the seizure of an additional HK$60 million believed to be ill-gotten gains.

One notable arrest was that of Joseph Lam, a prominent figure in the crypto community and a former attorney, due to his purported ties with JPEX.

The investigation into JPEX was initiated after the Securities and Futures Commission (SFC) cautioned about misleading claims made by crypto influencers and the platform itself, insinuating that JPEX had sought a virtual asset trading license in the region.

JPEX expressed its discontent with the authorities’ actions, claiming it faced “unjust treatment.” The exchange highlighted that while other platforms were welcomed into the Hong Kong market, JPEX faced continuous challenges, including the SFC urging its partners to sever ties.

GettyImages-1676885268.jpg
Hong Kong police display seized cash and other items at a press conference on September 19, 2023, after the arrests of eight people with ties to cryptocurrency platform JPEX. The arrests were made after authorities received more than 1,400 reports from potential victims who claimed to have lost around 128 million USD on troubled cryptocurrency exchange JPEX. HOLMES CHAN/AFP VIA GETTY IMAGES.

“JPEX had been on their radar as an unlicensed entity since July 2022. Despite the introduction of a licensing system for crypto trading in June, JPEX neither applied for a license nor ceased its operations,” said the SFC in emphasis

Despite public warnings about unregulated exchanges, JPEX’s activities deteriorated, prompting the SFC to publicly denounce the platform.

The SFC reportedly notified Hong Kong Police’s commercial crime division, and Mak Wai-kwong, an official from the police’s commercial crime unit, indicated that the investigation is ongoing.

© 2023 Zenger News.com. Zenger News does not provide investment advice. All rights reserved.

Produced in association with Benzinga

Edited by Judy J. Rotich and Newsdesk Manager

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