Hong Kong police have made three new arrests in the alleged fraud case linked to crypto exchange platform JPEX, as the number of reported victims rose to 2,407 with losses totalling almost HK$1.5 billion.

Official homepage of the unlicensed cryptocurrency exchange platform JPEX, on September 19, 2023. Photo: Kyle Lam/HKFP.

A total of 15 people have been arrested so far in connection with the JPEX “fraud” scandal, police said in a statement on Wednesday evening. The force received reports from 2,407 people who said they were victims in the case that saw losses totalling HK$1.499 billion.

“The investigation of the case is still ongoing, and the police do not rule out that more individuals may be arrested,” a Chinese-language press release from the police read.

The first round of arrests took place around two weeks ago when police detained four men and four women – aged between 22 and 52 – on suspicion of conspiracy to defraud. Among the arrestees who were released on bail without charge were social media influencers Joseph Lam and Chan Yee.

The arrested individuals were said to have used false advertising and unlawful means to lure victims to open accounts and make investments on JPEX. The crypto platform then subsequently imposed restrictions on withdrawal limits and raised the handling fee for withdrawal significantly, leaving customers unable to withdraw their virtual assets, police alleged.

Joseph Lam JPEX
Influencer and insurance agent Joseph Lam. Photo: Kyle Lam/HKFP.

Lam, an insurance agent and former barrister, told the press last Friday that he had closed his company and terminated the rental contract for his office. But he did not disclose any details about the JPEX investigation.

The influencer, who ran an over-the-counter crypto exchange store in the city, said on social media in July that he had applied to join JPEX as a partner. Investigations by local newspaper Ming Pao revealed that Lam had spoken at talks on crypto currency investment in July, during which he promoted the unlicensed platform and urged people to invest through it.

Police detained more people following the initial arrests, but did not specify whether they were also suspected of conspiracy to defraud, an offence punishable by up to 14 years of imprisonment.

On Wednesday, Secretary for Security Chris Tang said police were actively investigating the JPEX case and working closely with the Securities and Futures Commission. The financial watchdog said on Monday that it would reveal the names of cryptocurrency exchanges that have applied for trading licences, after it faced criticism from the industry and lawmakers over its handling of the alleged large-scale fraud case.

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Ho Long Sze Kelly is a Hong Kong-based journalist covering politics, criminal justice, human rights, social welfare and education. As a Senior Reporter at Hong Kong Free Press, she has covered the aftermath of the 2019 extradition bill protests and the Covid-19 pandemic extensively, as well as documented the transformation of her home city under the Beijing-imposed national security law.

Kelly has a bachelor's degree in Journalism from the University of Hong Kong, with a second major in Politics and Public Administration. Prior to joining HKFP in 2020, she was on the frontlines covering the 2019 citywide unrest for South China Morning Post’s Young Post. She also covered sports and youth-related issues.