Hong Kong police have arrested internet celebrity Joseph Lam Chok on suspicion of promoting JPEX, a cryptocurrency trading platform labeled “rugpull” by users and investors.
Following his arrest, Lam was interrogated by officers from the police’s commercial crime bureau Monday, according to a South China Morning Post (SCMP) report. The report also revealed that authorities raided Lam’s office at the Entertainment Building in Central.
Controversies Surrounding JPEX
Lam’s arrest follows a series of concerns raised over the operations of JPEX. Authorities said they had received more than 83 complaints about the trading platform, with users claiming to have lost roughly HK$34 million ($4.3 million). The Hong Kong police also stated that they received a referral from the China Securities Regulatory Commission for suspicion of fraud related to the platform.
Last week, Hong Kong’s Securities and Futures Commission (SFC) issued a statement saying that no entity under the JPEX Group was licensed to operate in the region. The securities regulator urged investors to be wary of the platform.
According to the SFC, JPEX has been actively promoting its products to the general public through internet celebrities and over-the-counter exchange shops while not registered in the region. JPEX also lied about obtaining licenses from foreign regulators and offering extravagant returns on savings products, the regulator said.
Last year, the securities watchdog added two JPEX-affiliated entities to its alert list, showing that the platform solicited Hong Kong investors without registration.
JPEX Shuts Down Trading Amid Probe
Meanwhile, amid the ongoing investigations by the Hong Kong police, JPEX has shut down trading activities on its platform. In a statement on Sunday, JPEX stated that users will not be able to place new orders on its Earn Trading interface from September 18.
JPEX said it is negotiating with third-party market makers to resolve a “liquidity shortage” after its partnered third-party market makers froze funds due to the ongoing probe by Hong Kong authorities.
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