- Hong Kong police have arrested six people connected to the cryptocurrency exchange, JPEX.
- JPEX has halted operations amid the Hong Kong financial regulator’s probe into the crypto exchange.
Hong Kong Probe Into Unregulated Crypto Exchange
According to the Securities and Futures Commission (Hong Kong’s financial regulator), JPEX, a crypto exchange in the state, has been operating without a license. Hong Kong police have received over a thousand complaints about the platform involving over $128 million lost in the exchange’s liquidity crunch.
Hong Kong Police launched an investigation into the unlicensed cryptocurrency exchange, JPEX, and arrested six people, including two social media influencers associated with the crypto exchange.
Among the crypto influencers arrested by the police was Joseph Lam, a former lawyer and crypto influencer. He was apprehended by the police for suspected association with JPEX. According to local reports, Lam’s office was raided, and the police confiscated some items connected to the crypto exchange.
Before the arrest, the Securities and Futures Commission of Hong Kong had warned investors about the unregulated crypto exchange.
“The Securities and Futures Commission (SFC) is aware that a virtual asset trading platform (VATP) known as “JPEX” has been actively promoting its products and services to the Hong Kong public through social media influencers and key opinion leaders (KOLs) as well as over-the-counter virtual asset money changers (OTC Shops). The SFC wishes to make it clear that no entity in the JPEX group is licensed by the SFC or has applied to the SFC for a license to operate a VATP in Hong Kong,” the press release reads.
Hong Kong’s market regulator revealed more details about the misleading statements made by JPEX, intending to defraud investors.
The regulator claimed that JPEX misrepresented itself as a registered virtual asset trading platform and offered services exclusive to virtual asset trading platforms under the law.
In response, JPEX criticized the SFC’s statements.
“As an operator in the cryptocurrency industry and a promoter of the Web 3.0 concept, JPEX expresses extreme disappointment at the SFC’s unfair practices that disrupt market order,” the crypto exchange stated in a post.
“Not only does their attitude contradict the government’s policy development direction of making Hong Kong a Web 3.0 city, but their biased stance also does not fulfill their role as a fair and impartial regulator, let alone protect the multitude of investors in Hong Kong.”
JPEX Halts Operations Following SFC Investigation
On September 17th, JPEX announced its plan to halt operations in Hong Kong citing liquidity issues with third-party market makers.
“Recently, due to the unfair treatment by relevant institutions in Hong Kong towards JPEX, a cryptocurrency trading platform, and a series of negative news, our partnered third-party market makers have maliciously frozen funds. They demanded more information from the platform for negotiation, restricting our liquidity and significantly increasing our daily operating costs, leading to operational difficulties,” JPEX stated in a blogpost.
In the blog post, the unlicensed crypto exchange stated that it will delist its Earn Trading interface but existing orders will be processed. The crypto exchange promised to continue operations to maintain its user-centric approach.