Hong Kong Police Act Swiftly Against $403m Crypto Exchange Fraud

After months of inactivity, Hong Kong police authorities have begun to freeze assets totaling over US$29 million associated with JPEX, a crypto exchange that collapsed in September 2023.

In another swift move, the police made further arrests, bringing the total number of individuals connected to JPEX, including employees and social media influencers, to 72. According to Police Commissioner Raymond Siu, more than 2,600 individuals suffered losses estimated to be US$206 million due to their involvement with JPEX.

However, the authorities have not verified the identity or location of the individuals or entities behind the defunct exchange. As a result, no charges have been filed in connection with the case. Siu revealed that back in 2023, crypto-related fraudulent activities accounted for over half of the US$764 million investment losses.

The Securities and Futures Commission (SFC) of Hong Kong has taken necessary steps to address the issue by apprehending figures linked to JPEX, including influencer Joseph Lam and Feng Shui expert Clement Chan. Likewise, authorities caught an unidentified suspect attempting to destroy documents in a bathtub using bleach.

Furthermore, the SFC has taken steps to curb lawmakers criticisms by listing platforms seeking licenses and those deemed suspicious. Nonetheless, identifying suspicious platforms often follows user complaints and financial losses, indicating a delay in regulatory action.

One such case is BitForex, a crypto exchange platform that purports to be Hong Kong-based. In late February, approximately US$57 million was withdrawn from its wallets, weeks after CEO Jason Luo announced his resignation.

Afterward, token projects associated with BitForex claimed to have contacted Luo, who disclosed he was being probed in mainland China. However, these claims await official confirmation.

Hong Kong authorities have been displaying messages against scams in public places, including university restrooms, residential buildings, and metro stations. In addition, mobile networks like China Mobile HK issue pop-up alerts cautioning users about potential scam calls from international numbers.