Hong Kong police officers have taken influential crypto personality Joseph Lam Chok into custody for his involvement in promoting the JPEX crypto platform, as reported by the South China Morning Post on September 18th. The authorities interrogated Lam Chok and conducted a raid at his company’s location in the Entertainment building in Central.
JPEX is widely believed to be a rug-pulled crypto platform. The Hong Kong police disclosed that they have received over 80 complaints related to the exchange, with customers claiming losses totaling approximately $34 million. This investigation was initiated after the China Securities Regulatory Commission (CSRC) referred the case to the Hong Kong police, prompting the agency to establish a hotline for the public to report any related incidents. The CSRC stated that JPEX had been promoting its services through various entities, none of which were properly registered with the regulatory authorities in China or Hong Kong.
Shortly before the arrest, JPEX announced the temporary pause of its Earn Trading transactions, effective September 18th. This move implies that users will be unable to place new earn orders, although existing orders will continue to accrue rewards until their stipulated end date. The platform has been gradually suspending certain services amidst concerns surrounding the legitimacy of its licensing for regulated operations. Specifically, the Hong Kong Securities and Futures Commission recently scrutinized JPEX’s yield offering on USDT, leading the exchange to increase USDT withdrawal fees in order to maintain funds.
The arrest of Lam Chok and the investigation into JPEX come in the wake of intensified efforts by Hong Kong authorities to combat crypto scams and unregistered exchanges. This crackdown has been particularly prominent since the implementation of Hong Kong’s new crypto regulatory regime in June 2023.
The arrest of a prominent crypto influencer like Joseph Lam Chok raises concerns about the prevalence of fraudulent activities within the cryptocurrency industry and the potential impact on unsuspecting investors. Rogue actors exploiting regulatory gaps pose serious risks to individuals who trust influential figures to guide their investment decisions.
It is crucial for investors to conduct thorough due diligence before engaging with any crypto platform or investment opportunity. Verifying licensing and regulatory compliance is essential to protect oneself from falling victim to scams or illegal activities. Additionally, seeking advice from reputable sources and recognized experts within the blockchain and cryptocurrency space can offer valuable guidance when navigating the complex landscape of digital assets.
Hong Kong’s continued efforts to crack down on crypto scams and unregulated exchanges serve as a reminder that regulatory enforcement plays a vital role in ensuring the integrity and security of the crypto industry. Moving forward, collaboration between regulatory bodies, law enforcement agencies, and the crypto community will be crucial in effectively combating fraudulent schemes and promoting trust in this rapidly evolving technology.