Hong Kong police have arrested 30 more people in connection with an alleged fraud scandal surrounding crypto exchange platform JPEX. So far, 2,623 people have come forward as victims in the case involving losses of around HK$1.6 billion.
The total number of arrests linked to JPEX rose to 66, according to a police statement issued on Sunday evening. The authorities have yet to press charges, with all those apprehended released on bail pending investigation.
Police made 30 new arrests in less than a month, after reporting on October 30 that 36 people had been apprehended over their links to the case.
The JPEX case has cast a shadow over Hong Kong’s embrace of digital assets and revealed regulatory gaps soon after the city rolled out rules requiring crypto exchanges to be licensed and meet investor protection standards.
Between January and September, the city recorded 4,331 fraud cases related to investment, with losses totalling around HK$2.82 billion.
Authorities in Hong Kong first took action against JPEX in mid-September, when four men and four women were apprehended on suspicion of conspiracy to defraud. Some of the high-profile arrests involved social media influencers Joseph Lam and Chan Yee.
Police alleged that false advertising and unlawful means had been used to lure victims to open accounts and make investments on JPEX. The crypto platform then imposed restrictions on withdrawal limits and raised the withdrawal handling fee, leaving customers unable to access their virtual assets, police said.
Hounax
Police on Saturday warned the public against another suspected fraudulent cryptocurrency trading platform, after 131 people reported to have lost close to HK$120 million. Among the victims, HK$12 million was allegedly swindled from a 69-year-old woman, marking the biggest loss in the case so far.
According to police, the alleged fraudsters claimed to represent a licensed investment trading platform and persuaded people to invest in stocks or cryptocurrency via social media. They would then send a link to the victims and asked them to download a fraudulent investment app called Hounax.
After the victims created an investment account on the platform, the alleged fraudsters would ask them to transfer the money to a third party account, using FPS or local bank transfers, under the pretext of topping up the investment account.
The alleged fraudsters would provide false transaction records showing earnings to gain the victims’ trusts, police said. They would then decline requests to withdraw funds from the platform, or require a “verification fee” totalling 80 per cent of the amount invested.
The Securities and Futures Commission warned in early November that Hounax was a suspicious virtual asset trading platform. The platform falsely claimed to be cooperating with a financial institution and a venture capital firm, the regulator said, adding it appeared to target investors in the city with pre-populated +852 field in its user log-in page and because it used “Hounax Hong Kong” as the name of its social media accounts.
The Hounax website has been labelled as “deceptive” with a warning saying the site may trick users into installing software or disclosing personal information.
No one has been arrested so far.
Police urged the public to verify the identify of anyone who claimed to be a staff member of a bank or an investment company and not to click on any links. They also advised people against downloading suspicious mobile phone applications, or entering their bank account details on suspicious websites or apps.
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