Hong Kong police have reportedly arrested six people linked to cryptocurrency exchange JPEX after receiving a large number of fraud complaints.
Join the BeInCrypto Community on Telegram to learn about technical analysis, discuss cryptocurrencies, and get answers to all your questions from our experts and professional traders Please.
Yesterday, following fraud complaints, JPEX suspended trading on its Hong Kong platform. The exchange attributed the action to “unfair treatment by the institutions involved,” placing the onus on its third-party market makers.
Cryptocurrency exchange JPEX faces a large number of fraud complaints
A recent local report revealed that Hong Kong police took action, arresting four men and two women suspected of being involved with cryptocurrency exchange JPEX. Accordingly, two of these are YouTube influencers: Joseph Lam Chok and Chan Wing-yee. Both allegedly promoted the exchange to their online audiences.
According to the report, authorities received 1,408 complaints alleging fraudulent activities related to JPEX. The reported amounts involved totaled approximately HK$1 billion, equivalent to US$128 million.
Hong Kong's Securities and Futures Commission (SFC) recently issued a warning about JPEX's licensing status. The main basis for this agency to issue a warning is that JPEX operates without a valid license. The SFC further alleges that JPEX appears to lack any intention of registering any of these licenses.
On the same day of the arrest, JPEX announced that it was actively preparing to comply with Hong Kong's cryptocurrency regulatory requirements before the “end of the grace period for the licensing system.” However, it claims to be treated unfairly compared to other exchanges in the region:
“However, the SFC failed to deliver on its promise. As other cryptocurrency exchanges announced their entry into the Hong Kong market and began promoting widely, JPEX was continuously treated unfairly.”
Service on JPEX stopped suddenly
This comes just one day after JPEX provided an explanation to users about the sudden interruption of its services. As noted by BeInCrypto, on September 17, JPEX issued a statement informing users that it had paused all transactions on its Earn trading service. JPEX notes this change will take effect within 24 hours.
It attributed the service suspension to lack of liquidation. This is caused by third-party market makers. It further explains that to be stable, it must change its structure. JPEX will withhold all details until they have completed all necessary information.
