Hong Kong’s financial watchdog has taken a significant step against the increasing cryptocurrency crimes in the region. As part of its crypto regulatory initiatives, the HK police have charged 16 individuals, including social media influencer Joseph Lam, in connection with the HK$1.6 billion ($205.8 million) JPEX crypto scandal.
This far-reaching case, which has sent shockwaves through the financial and crypto communities, involves more than 2,700 investors who were allegedly defrauded by the JPEX platform. This makes the JPEX crypto scandal the largest of its kind in Hong Kong’s history.
JPEX Crypto Scandal: Hong Kong Police Take Action
According to a recent South China Morning Post report, Hong Kong authorities have charged 16 individuals for their alleged involvement in the $205.8 million JPEX crypto scandal. According to police, JPEX, the virtual asset trading platform launched in 2020, lured investors with promises of low-risk, high-return investment through ads, social media, and influencers.
Among the 16 charged, six are believed to be key figures in the crime, while seven others, including social media influencer Joseph Lee, were either influencers or involved in over-the-counter crypto trading. These 16 individuals, including influencer Lam and another influencer Chan Wing-yee, were charged with money laundering. They are set to appear in Eastern Court on Thursday morning.
Since the investigation into the JPEX crypto fraud began in September 2023, authorities have arrested 8 individuals, including 14 key members of the suspected criminal syndicate, and seized assets worth HK$228 million. As per reports, the case involves defrauding about 2,700 investors, with the charges including conspiracy to defraud, money laundering, and inducing investment through false representations.
Chief Superintendent Ernest Wong Chun-yue of the commercial crime bureau addressed the investigation as “highly difficult and complex” due to the large number of victims and the vast amount of data involved, including extensive bank and crypto transaction records. Adding that the force has also conducted digital forensics, Wong stated,
“During an investigation, police need time to handle exhibits and evidence. We need to unravel the whole affair and look for useful information.”
Interpol Notices Sent for Three Accused
Interpol has issued red notices for three fugitives, Mok Tsun-ting, Cheung Chon-cheong, and Kwok Ho-lun, who are believed to have played key roles in the JPEX crypto scheme. A red notice is a request to law enforcement agencies worldwide to locate and arrest the individuals pending extradition.
Senior Superintendent Fanny Kung Hing-fun commented on the matter, stating that some suspects had left the region before arrests were made. This prompted the police to issue a red notice through Interpol for the three individuals.
How the JPEX Scam Operated?
Significantly, the police alleged that JPEX flooded the city with ads promoting itself as a low-risk, high-return cryptocurrency exchange. The platform was further promoted by over-the-counter (OTC) trading houses and influencers, who encouraged users to open accounts and invest.
The platform then restricted withdrawals and increased handling fees, blocking customers’ access to their assets. Meanwhile, suspects allegedly transferred customer assets to multiple crypto wallets for money laundering and used some funds to buy luxury cars and amass large amounts of cash inconsistent with their income.
It is noteworthy that the city’s largest crypto crime broke over two years after initial arrests in September 2023. With the latest charges, authorities are still investigating 64 suspects, including eight previously identified core members of the syndicate.
Also Read: Hong Kong to Let Crypto Exchanges Access Global Liquidity in Major Policy Shift
