Hong Kong Crypto Exchange Platform JPEX Involved in a $178M Fraud

Richard M.

September 26, 2023

3 minutes read

Hong Kong Authorities claimed they received over 23,000 complaints against the Dubai-registered cryptocurrency exchange platform, JPEX, and confirmed its involvement in $178M fraud.

Hong Kong’s Security and Futures Commission (SFC) investigated JPEX and revealed that they are illegally operating, without a license, and involved in fraud. Mainly, they received more than 23,000 complaints about the exchange platform, involving $178m worth of fraud. Before the investigation, in the last year, JPEX claimed to be an authorised digital currency exchange platform by advertising in Hong Kong on taxis, building walls, and trams, including influencer and digital media.

After the SFC’s investigation, JPEX shut down the trading platform, and Hong Kong police arrested their staff for fraud. On allegations of conspiring to commit fraud, police detained at least 11 persons, including JPEX personnel, employees at cryptocurrency retailers, and online influencers, for allegedly running an unauthorised cryptocurrency exchange campaign. Moreover, they accused the company of misleading the investor with their slogan “investment: more than just stocks.”

The home-based of the significant trading platforms, Hong Kong, launched a new registration regime in June to maintain its top position in virtual asset trading. The investigation against the JPEX testing the new strict crypto regime plans of Hong Kong’s financial regulatory department. The head of blockchain research at Daiwa Capital Markets, Carlton Lai, stated, “ I think the regulators will look back and see that they should have clamped down on non-licensed players on day one, when the licensing regime went live. The ball is now in the regulator’s court to prove that their new regime can protect investors who use licensed platforms.”

In the context of the JPEX investigation, which resulted in numerous arrests in the territory, the SFC noted that it would publish a list of cryptocurrency exchange license applicants. SFC stated in the statement, “The JPEX incident highlights the risks of dealing with unregulated virtual asset trading platforms (VATPs) and the need for proper regulation to maintain market confidence. It also shows that dissemination of information to the investing public through the Alert List, warnings, and investor education can be further enhanced to help members of the investing public better understand the potential risks entailed by suspicious websites or VATPs.”

Do you want to see how fast and accurate our verification solutions are?

Request Demo