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JPEX is Hong Kong’s FTX. What we know about the crypto exchange collapse

JPEX is Hong Kong’s FTX. What we know about the crypto exchange collapse
People & Culture
The JPEX scandal has had far-reaching effects on Hong Kong's crypto industry. Credit: JEROME FAVRE/EPA-EFE/Shutterstock
  • At least 27 people have been arrested in what some are calling Hong Kong's biggest financial scandal.
  • The collapse of the JPEX crypto exchange has been compared to that of FTX's, but there are several key differences.
  • We've compiled the highlights of the case so far.

This story was updated on October 6.

Hong Kong authorities are scrambling to deal with the fallout of what some are calling the biggest financial fraud in the city’s history, as the JPEX scandal continues to unfold.

Dubai-based JPEX was founded in 2019 and operational in Hong Kong since July 2020. Its Hong Kong office was raided earlier this month, trapping millions worth of investors’ crypto.

Its collapse has been compared to FTX, but the unravelling of JPEX in Hong Kong has several key differences. For one, it’s still not clear who runs it. And few industry insiders had heard of JPEX before, beyond its citywide advertising campaigns.

As authorities rush to find the missing — and so far, unknown — culprits and appease angry investors, the impact in the crypto-friendly Asian hub has been far-reaching. More than 2,300 victims have been affected, according to authorities.

And the JPEX scandal has led authorities to shut down many over-the-counter crypto shops that were especially popular with visitors from mainland China.

Here’s what you need to know about the case:

Massive claims and targeted advertisements

  • Despite claims by JPEX that the firm managed as much as $2 billion in assets, information on its history and operations is relatively scarce.
  • The company used advertisements in Hong Kong’s public areas such as transportation hubs to target retail investors. The ads promised investors yields as high as 20%.
  • Advertising efforts beyond Hong Kong into Taiwan and the Philippines, and included an ice cream truck campaign.
  • JPEX also employed prominent Hong Kong influencers to promote the exchange online.

Frozen withdrawals and shifting account balances

  • The issues began after users were reportedly unable to withdraw funds, or had account balances reduced or altered. Many of these users filed complaints against the exchange to Hong Kong police.
  • Hong Kong authorities say the exchange’s mismanagement of user funds has affected at least 2,300 victims, with losses estimated around HK$1.43 billion, or about $182 million. Police say many of those affected are inexperienced retail traders.
  • Facebook groups with names like “JPEX Sufferers” have formed as anguished investors seek information in hopes of retrieving their funds.

Hong Kong takes action

  • On September 13, Hong Kong’s Securities and Futures Commission (SFC) warned the public that JPEX was not licenced to operate in the region, and outlined alleged violations of sections of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance.
  • Police raided JPEX offices in Hong Kong on that same day.
  • Some of the JPEX team was away in Singapore attending the Token2049 conference at the time, and attendees tweeted that the firm had abandoned its booth the following day.
  • JPEX then increased its withdrawal fee to 999 Tether (USDT). That fee was too high for many small accounts, making some withdrawals impossible.
  • On September 17, JPEX blamed third-party market makers for its liquidity crisis and consequent fee raise. The company pledged to return everything to normal.
  • Police requested that local telecom operators block access to the exchange, and local news organisation HKFP reported on September 21 that JPEX was inaccessible locally.
  • JPEX issued two statements that week, saying that the platform had been “impacted by an event involving SFC.” It said the company had “always hoped to hold rational consultations and communications with the SFC,” but efforts to come into compliance had often been “dismissed or sidestepped.”
  • Days later, the exchange suspended trading on September 25.

Arrests made, including influencers

  • At least 15 arrests had been made as of September 28, according to local reports.
  • Police on September 29 subsequently arrested four people “close to the core” of JPEX in a raid, the South China Morning Post reported. “One suspect tried to destroy evidence using paper shredders and bleach in the bathtub,” according to the newspaper.
  • The arrests included influencer Joseph Lam by the Hong Kong Commercial Crime Bureau in a raid of his offices.
  • Lam is a former lawyer who calls himself Hong Kong’s “Trolling King.” He was one of several influencers promoting JPEX services.
  • Alongside Chok, two YouTubers — Chan Wing-yee and Chu Ka-fai — were arrested.
  • Authorities say the ringleaders of the exchange have evaded capture.
  • On Thursday, October 5, Hong Kong police arrested six more men. Among them was Chan Siu-lung, CEO of over-the-counter (OTC) virtual asset changer CryptoPARD, as well as two employees of OTC outlets Coingaroo and Tung Club.
  • On Friday, October, 6, new arrests were made, bringing the total of arrests up to 27.

Regulators scramble to tie up loose ends

  • The SFC said on September 25 that it intends to do more to keep investors informed and educated.
  • The agency accused JPEX of “suspicious features” and of making misleading claims regarding its licence status.
  • Hong Kong Chief Executive John Lee highlighted the need for firms to adhere to licensing rules.
  • JPEX said it had “strived to comply” with the local requirements which took effect in June this year, but its efforts were “dismissed or sidestepped with official rhetoric” by the Commission, the BBC reported.
  • The SFC didn’t previously disclose the names of licence applicants, but has pledged to name applicants moving forward.
  • Following the JPEX scandal, Hong Kong announced on Monday it would work to make the license application process and status for crypto firms more transparent.
  • Only four exchanges have applied for licences ahead of a 2024 deadline: HKBitEx, Hong Kong BGE, HKVAX, and Victory.
  • Only OSL and Hashkey Exchange have received licences to date.

This is an evolving story and we will update it as we learn more.

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Tyler Pearson is a Researcher at DL News. He is based out of Alberta, Canada. Email him with tips at Callan Quinn is the Asia correspondent for DL News. Got a tip about crypto in Asia? Contact her at

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