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JPEX scandal masterminds still at large as 11 suspects taken into custody: Report

Validated Media

The masterminds behind Hong Kong’s JPEX alleged crypto exchange scandal — referred to by some as the largest financial fraud to ever hit the city — have eluded authorities despite 11 people already being taken in for questioning in relation to the case.

According to a Sept. 23 report from the South China Morning Post, police have now received more than 2,265 complaints from victims of the exchange, with the total monetary value of the fallout estimated to be in the vicinity of $178 million (1.4 billion Hong Kong dollars).

The complaints appear to be related to difficulties withdrawing cryptocurrency from the platform. On Sept. 15, the JPEX exchange raised its withdrawal fees to 999 USDT.

So far, the list of people reportedly taken into custody for questioning includes crypto influencer Joseph Lam Chok, who has made numerous attempts to publicly distance himself from the exchange.

Police have also arrested three employees of the JPEX Technical Support Company, along with two YouTubers, Chan Wing-yee and Chu Ka-fai — who have a combined following of more than 200,000 — in relation to the scandal.

Others sought or taken in for questioning include the company's sole director Kwok Ho-lun, a restaurant director, and three celebrities who had reportedly promoted JPEX in some form in the pa. 

Hong Kong’s authorities however said the ringleaders of the operation are still on the run. Police added that the investigation was continuing and further arrests were likely in the near future.

Local police have also reportedly enlisted the help of Interpol and other international enforcement agencies after it identified suspicious crypto transfers being made from the JPEX exchange. Police has also requested that local telecommunications providers block access to the exchange’s website.

During the Token2049 conference in Singapore on Sept. 13, the JPEX team allegedly abandoned its corporate booth after Hong Kong police arrested six employees on charges of fraud for operating an unlicensed crypto exchange.

Related: Troubled crypto exchange JPEX applies for deregistration in Australia

The JPEX scandal first appeared on the radar on Sept. 13 when Hong Kong’s financial regulator notified the public that it had received over 1,000 complaints about the unregistered crypto exchange platform, with claims of losses amounting to over $128 million (HK$1 billion).

The exchange later shuttered a number of its yield-bearing products, and ratcheted up its withdrawal fees to 999 USDT, while blaming its third-party market-makers for “maliciously” freezing liquidity.

At the time, it claimed that it had attempted to register with the relevant authorities and cited “unfair” treatment from the SFC.

In a Sept. 20 statement, the SFC revealed that JPEX had been operating without a license for virtual asset trading.

According to the official website, JPEX purports to be headquartered in Dubai and claims to be licensed for crypto trading activities in the United States, Canada and Australia. Founded in 2020, JPEX claimed to oversee some $2 billion in assets and said its goal was to be included in the world’s top five crypto exchanges.

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