Hong Kong authorities crack down on unlicensed crypto exchange JPEX

Hong Kong authorities arrested eight indiviHong Kong authorities arrested eight indivi

In this post:

  • Hong Kong authorities arrested eight individuals, including social media influencers, connected to JPEX, an unlicensed cryptocurrency exchange, following complaints from over 1,600 investors who lost more than $150 million in assets.
  • The Securities and Futures Commission (SFC) is intensifying regulatory oversight, with Chief Executive John Lee emphasizing the need for investors to use only licensed platforms. The SFC is also investigating JPEX for potential violations of anti-money laundering ordinances.

Hong Kong authorities arrested eight individuals linked to JPEX, an unlicensed cryptocurrency exchange. The arrests included social media influencers who had promoted the platform and employees of JPEX. The crackdown followed complaints from more than 1,600 investors who claimed to have lost over $150 million in assets. Hong Kong police have since frozen bank accounts worth $1 million and seized properties valued at $5.6 million.

Regulatory oversight intensifies amid growing concerns

Hong Kong Chief Executive John Lee emphasized the importance of investing only in licensed platforms. “The Securities and Futures Commission (SFC) will closely monitor the situation to ensure that investors are sufficiently protected,” Lee stated. 

The SFC had previously warned the public about JPEX, stating that the platform was unlicensed and unauthorized to operate in Hong Kong. The regulatory body had received numerous complaints from investors who were unable to withdraw their virtual assets or found their account balances altered.

Elizabeth Wong, who heads the SFC’s fintech unit, revealed that the commission is investigating whether JPEX violated anti-money laundering ordinances. The case has been referred to the police, and the SFC will assist in the investigation. Police Senior Superintendent Kung Hing-fun indicated that most of the investors were inexperienced and had been lured by promises of high returns and low risks.

JPEX announced the suspension of trading on its platform, blaming an unidentified third-party market maker for “maliciously” freezing funds, Cryptopolitan reported. The platform also increased its withdrawal fee to $1,000 in an apparent move to discourage users from withdrawing their assets.

Hong Kong has been a growing hub for cryptocurrency trading, especially after mainland China banned such transactions in 2021. The SFC began accepting applications for cryptocurrency exchanges in June, allowing licensed operators to serve retail investors. So far, only two exchanges—OSL Exchange and Hashkey Exchange—have received approval.

 Authorities are now ramping up efforts to educate the public about the risks associated with unlicensed platforms.  The JPEX scandal comes at a time when Hong Kong is striving to establish itself as a reputable crypto hub.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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