Despite authorities taking 11 individuals into custody for questioning in connection with the JPEX crypto exchange scandal in Hong Kong, the alleged orchestrators of the scheme remain at large. Hong Kong police are now seeking assistance from Interpol in their efforts to locate them.
The individuals behind the JPEX cryptocurrency exchange scandal, which has been dubbed one of the most significant financial frauds in Hong Kong's history, have managed to evade capture. Police have received over 2,265 complaints from victims of the exchange, with estimated losses totaling around $178 million (1.4 billion Hong Kong dollars).
The complaints primarily revolve around difficulties in withdrawing cryptocurrency from the platform. On September 15, JPEX raised its withdrawal fees to 999 Tether.
Among those taken into custody for questioning are Joseph Lam Chok, a crypto influencer who has distanced himself from the exchange, and three employees of the JPEX Technical Support Company. Additionally, two YouTubers, Chan Wing-yee and Chu Ka-fai, with a combined following of over 200,000, have been arrested in connection with the scandal.
Others sought for questioning include the company's sole director, Kwok Ho-lun, a restaurant director, and three celebrities who had reportedly promoted JPEX in some capacity.
However, the masterminds behind the operation are still evading authorities. The police continue their investigation, and further arrests are anticipated.
Hong Kong authorities have enlisted the help of Interpol and other international enforcement agencies after identifying suspicious crypto transfers from JPEX. They have also requested local telecommunications providers to block access to the exchange's website.
During the Token2049 conference in Singapore on September 13, the JPEX team reportedly abandoned its corporate booth following the arrest of six employees by Hong Kong police on fraud charges related to operating an unlicensed crypto exchange.
The JPEX scandal initially came to light on September 13, when Hong Kong's financial regulator disclosed over 1,000 complaints about the unregistered crypto exchange platform, with reported losses exceeding $128 million (1 billion Hong Kong dollars).
Subsequently, JPEX suspended several yield-bearing products and increased withdrawal fees to 999 USDT, blaming third-party market makers for liquidity issues. The exchange claimed it had tried to register with relevant authorities but faced "unfair" treatment from regulatory bodies, including the Securities and Futures Commission (SFC).
In a statement on September 20, the SFC revealed that JPEX had been operating without a license for virtual asset trading.
According to its official website, JPEX claims to be headquartered in Dubai and asserts it is licensed for crypto trading activities in the United States, Canada, and Australia. Founded in 2020, JPEX purportedly oversaw around $2 billion in assets and aimed to become one of the world's top five crypto exchanges.
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