JPEX Crypto Exchange Accuses SFC of Unfair Treatment as Police Arrest Six

JPEX Crypto Exchange Accuses SFC of Unfair Treatment as Police Arrest Six

by September 19, 2023

Six people have been arrested in Hong Kong as part of an investigation into suspected fraud involving the cryptocurrency exchange JPEX. According to the South China Morning Post, this scandal could cost investors up to HK$1 billion (US$ 127.7 million) in losses.

Influencers who had been promoting the crypto exchange, Joseph Lam Chok and Chan Wing-yee, were among the six being held on suspicion of conspiracy to defraud.

The arrests come after the Securities and Futures Commission (SFC) warned investors against using JPEX, saying that it is not licensed or regulated in the city.

In a statement, the SFC said that JPEX had been actively promoting its products and services to the public through social media influencers and key opinion leaders as well as over-the-counter virtual asset money changers (OTC Shops).

JPEX raised several red flags among them being the high returns that offered for some of its products and making false or misleading statements about its business and its relationships with other companies.

The exchange, however, denied any wrongdoing in a statement on Monday (18 September). JPEX claimed that SFC had subjected it to “continuous unfair treatment” by sending letters to all of its partners, requesting them to cease cooperating with the platform.

JPEX also said that it had requested for guidance from the SFC on 15 September 2023, just two days after SFC issued a warning about JPEX, but instead received a response saying that the commission had referred the matter to the police.

SFC’s reply to JPEX   Source: JPEX

The statement read,

“As an operator in the cryptocurrency industry and a promoter of the Web 3.0 concept, JPEX expresses extreme disappointment at the SFC’s unfair practices that disrupt market order. Not only does their attitude contradict the government’s policy development direction of making Hong Kong a Web 3.0 city, but their biased stance also does not fulfil their role as a fair and impartial regulator, let alone protect the multitude of investors in Hong Kong. The platform will serve as the best example to prove whether the SFC is indeed helping Hong Kong firmly step onto the path of building Web 3.0.”