Hong Kong Police Investigate JPEX Exchange After $4.3mn In Complaints

Hong Kong police are probing the JPEX cryptocurrency exchange following several complaints involving virtual assets valued at approximately HK$34 million (US$4.3 million). The investigation comes in the wake of a warning from the Hong Kong Securities and Futures Commission (SFC) against JPEX for its unregulated operations. Notably, around 83 users have filed complaints due to their inability to withdraw funds.

SFC Flags JPEX Exchange For Deceptive Tactics

The Hong Kong SFC issued a cautionary advisory to potential investors on Wednesday, emphasizing that JPEX had not filed any license applications, cautioning the public to exercise caution when encountering offers that appear too enticing to be legitimate. The SFC further revealed that JPEX had made false claims about obtaining licenses from overseas regulators and had promised high returns on savings products. The exchange also relied on social media influencers, who were often paid promoters, to disseminate misleading information.

Following the SFC’s warning, some users of JPEX reported difficulties withdrawing virtual assets from their online accounts. One user revealed that an attempt to withdraw 1,000 Tether tokens (USDT) resulted in only 25 being received, and the rest are held as processing fees.

Notably, the group administering the Telegram channel for JPEX-related complaints said that it received about 200 complaints, totaling over US$10 million in virtual assets. But blockchain transaction records indicate that JPEX has more than 30,000 users, potentially involving over US$300 million, the group added.

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JPEX Opaque Ownership

JPEX entered the Hong Kong market over two years ago and conducted aggressive promotion campaigns, including advertisements at MTR stations in prominent areas. The exchange also expanded its operations to Taiwan earlier this year, enlisting entertainer Nine Chen as its spokesperson.

However, Chen has since stated that his contract with JPEX ended in late July. The identities and locations of JPEX’s owners remain unclear due to the company’s non-transparent corporate structure.

As investigations continue, the Hong Kong police are urging victims to come forward and report their cases to the force. Given the increasing number of scam incidents in the segment, the cryptocurrency community is keeping a watchful eye on the developments surrounding JPEX.

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