Hong Kong Authorities Investigating Cryptocurrency Exchange JPEX for Fraud

Hong Kong authorities are currently conducting an investigation into cryptocurrency exchange JPEX for alleged fraud. So far, they have received over 2,000 complaints from affected investors.

Reports indicate that eleven individuals, including influencers who promoted the platform, have been detained in connection with the case.

Hong Kong Intensifies Investigation into JPEX

The police have stated that many of the investors, who were mostly inexperienced, were lured into investing in JPEX due to the company’s promise of high returns. To attract more customers, JPEX not only used influencers but also displayed advertisements on Hong Kong’s Mass Rail (MTR) train system through large billboards.

Currently, authorities have detained a total of eleven individuals for questioning, an increase from the initial six. Joseph Lam Chuk, a social media influencer who was taken into police custody, has claimed that he is no longer involved with JPEX, as reported by the South China Morning Post.

Arrests and Warning from Hong Kong’s Securities and Futures Commission

On September 13, Hong Kong’s Securities and Futures Commission (SFC) issued a warning, stating that JPEX was operating illegally without a license. The cryptocurrency exchange criticized the actions of the SFC, accusing them of applying undue pressure.

There were also reports that JPEX’s Hong Kong office address was occupied by a company called Coffee, whose employees claimed to have no knowledge of the cryptocurrency exchange. Authorities had already visited the address. Additionally, JPEX’s office in Taiwan was found to be empty.

DAO Stakeholder Dividend Distribution Plan

In response to the ongoing investigations and arrests, Hong Kong’s regulator has instructed telecom service providers to block JPEX’s official website and mobile applications. JPEX stated in a blog post that the SFC’s actions led to third-party market makers freezing funds maliciously.

To address the situation, JPEX introduced the “DAO Stakeholder Dividend Plan,” allowing users to convert their assets into DAO stakeholder dividends at a 1:1 ratio. As part of the plan, the cryptocurrency exchange intends to distribute 49% of DAO shareholders’ profits, totaling US$400 million, for subscription and transfer purposes.

JPEX also offers users a buyback option of 30% of the original conversion price after one year, specifically on September 20, 2024. The buyback offer increases to 100% after two years.

Users were given the opportunity to vote on the new scheme, with 70% approving and 30% disapproving as of September 23. The voting period will conclude on September 28, 2023.

Stay Informed with Additional News

For more news related to Hong Kong’s central bank and cryptocurrency companies, consider reading the article titled “Hong Kong’s central bank warns cryptocurrency companies against misleading banking claims.”