- Hong Kong police arrested the former lawyer in connection with promoting the platform JPEX.
- Authorities announced an investigation into the platforms last week.
- Other celebrities and influencers have faced charges in the US for prompting crypto platforms and tokens.
The crackdown on crypto celebrity influencers is going global.
Hong Kong police arrested influencer and former lawyer Joseph Lam in connection with a probe into cryptocurrency exchange JPEX, according to the South China Morning Post.
The arrest follows an investigation into JPEX that was announced last week. The Securities and Futures Commission warned investors to be cautious in dealing with the platform and said it was actively promoting its products and services to the Hong Kong public through social media influencers.
Lam was one of several influencers JPEX used to promote its products.
Lam’s arrest comes amid heightened regulatory scrutiny of cryptocurrency trading platforms in Hong Kong. In August, the SFC alerted the public that some platforms had falsely claimed to have submitted licence applications, giving “the public a false sense of assurance.”
Lam is a colourful character among Hong Kong influencers. An Oxford-educated former lawyer who dated Miss Hong Kong 2015, Lam was fired in June from insurance company Prudential for making “inappropriate comments” about a murder case on social media.
In 2020, he announced that if Joe Biden won the presidential election in the US, he would run naked down Canton Road, a busy thoroughfare in Kowloon. He later posted a video of himself doing just that, albeit in the much quieter area of Kennedy Town.
But he’s not the only influencer who has gotten into trouble for promoting cryptocurrencies and platforms. Kim Kardashian was paid $250,000 to post about Ethereum Max on Instagram. In 2022, Kardashian agreed to settle the charges and pay about $1.3 million in penalties with the US Securities and Exchange Commission.
In March, the SEC also filed charges against Lindsay Lohan, Jake Paul, Ne-Yo and five other celebrities for promoting crypto as part of a larger move against Justin Sun and Tron.
Last week, the SEC also charged the NFT collection Stoner Cats with conducting an unregistered offering of crypto asset securities. Actress Mila Kunis backed the project.
A host of celebrities also face lawsuits for the promotion of cryptocurrency exchange FTX. Three of them – NFL quarterback Trevor Lawrence, and YouTubers Tom Nash and Kevin Paffrath — recently settled the suits.
Jake Paul’s brother Logan Paul is yet to refund investors in CryptoZoo, an NFT game that was never built, despite having agreed to following an investigation by anti-scam Youtuber Coffeezilla.
The Hong Kong Commercial Crime Bureau, tasked with investigating serious and complex commercial fraud, led the operation that involved a raid on Lam’s offices, the newspaper reported.
“The SFC wishes to make it clear that no entity in the JPEX group is licensed by the SFC or has applied to the SFC for a licence to operate a VATP in Hong Kong,” it said in a statement.
The SFC added that it had observed a number of suspicious features about the practices of JPEX and those actively promoting it to the Hong Kong public.
The exchange, whose address is registered in Australia, said on Sunday that it had received “unfair treatment by relevant institutions in Hong Kong” and accused third-party market makers of “maliciously” freezing funds as a result of the SFC’s actions.
A sponsor at Token 2049 in Singapore, its staff abandoned its booth on the second day of the conference following the SFC announcement. It has since shut down some of its trading services.
At present, there are only two regulated exchanges in Hong Kong, HashKey Exchange and OSL, according to the SFC’s website.
However, under new regulations that were introduced in June, exchanges are able to cater to retail investors ahead of a deadline to apply for a licence early next year.
Got a story about crypto in Hong Kong? Get in touch with me at firstname.lastname@example.org.