Hong Kong arrests 6 people in fraud probes linked to halted cryptocurrency platform JPEX, in a case that may ‘involve HK$1 billion in assets’

Sources say ex-lawyer turned internet figure and YouTuber Chan Yee was detained on suspicion of conspiracy to defraud, with ‘about HK$1 billion’ involved

Securities watchdog earlier accused trading platform JPEX of relying on misleading statements from social media influencers ‘who are often paid promoters’

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Police escort influencer Joseph Lam (centre) from his office in Central. Photo: Jelly Tse

Published: 11:35am, 18 Sep 2023Updated: 10:08am, 19 Sep 2023

Hong Kong police arrested six people in connection to the halted cryptocurrency trading platform JPEX, exposing the vulnerabilities of the city’s open economy and free-for-all internet in a scandal that could rack up as much as HK$1 billion in losses.

Police arrested four men and two women – including the influencers Joseph Lam Chok and Chan Wing-yee – today after receiving 1,408 complaints alleging fraud at JPEX, the force said. The amount involved was estimated to be “about HK$1 billion (US$128 million)”.

JPEX, with offices and units in Dubai, Australia and the United States, halted cryptocurrency transactions on its Hong Kong platform today, citing “negative news” and what it called “unfair treatment by relevant institutions” that caused its partners to freeze its funds. Two days earlier, JPEX was named by Hong Kong’s Securities and Futures Commission (SFC) for operating without a license, and for “misleading investors”.

The case, coming three months after Hong Kong’s “virtual asset” regulations came into effect and opened the way for retail investors to dabble in cryptocurrencies, “is a positive step for Hong Kong’s ambitions to be a virtual asset hub,” said Jonathan Crompton, a partner at RPC in Hong Kong.

An undated photograph of a tram with the advertisement of the cryptocurrency exchange JPEX in Central. FACEBOOK/ JPEX-Crypto Platform

“It shows that the SFC is prepared to act against companies that do not comply with the new virtual asset trading platform regulations,” Crompton said. “In essence, this proves that the badge of being regulated in Hong Kong means something.”