- JPEX suspected of operating without a licence.
- Investors claim they've lost $200 million in mysterious case.
- Police officials seize Lamborghini as they search for unidentified founders.
Hong Kong police on Thursday and Friday took seven more individuals into custody in connection with the ongoing probe into the crypto exchange JPEX.
The move brings the total number of arrests linked to JPEX over the past month to 27, although the ringleaders of the operation are yet to be identified.
So far, no one has been charged.
Among the recent detainees is Chan Siu-lung, the CEO of CryptoPARD, an over-the-counter crypto trading shop. Staff from Coingaroo and Tung Club, two other trading venues, have been taken into custody. Coingaroo’s advertisements are still appearing on minibuses in Kowloon.
The exact link between JPEX and the over-the-counter trading shops in Hong Kong has not been confirmed by police, though several outlets did promote JPEX’s services to clients.
Other shops, including Coiner, have also been raided by police in connection with the probe.
Two of the detained individuals may be tied to the team operating JPEX, according to the South China Morning Post.
Police officials also said they impounded a white Lamborghini belonging to one of those arrested on suspicion it was purchased with proceeds from JPEX.
Investors who used JPEX have lost an estimated HK$1.55 billion ($200 million), police said.
On Wednesday, the Securities and Futures Commission (SFC) and Hong Kong police announced the formation of a specialised crypto task force.
As the investigation has unfolded, JPEX has become a hot topic in Hong Kong crypto circles even as web3 leaders have stayed quiet.
On Thursday, business leaders including Yat Siu, chairman of Animoca Brands, and Cynthia Wu, COO of Matrixport, gave their support for “strict and swift enforcement” against virtual asset service providers that break the city’s licensing rules or engage in illegal activities.
“We recommend that the Government work with the Web3 industry to educate the public by providing realistic examples of blockchain scams and fraudulent schemes, similarly to the existing measures in place to educate the public about telephone frauds,” they said in a statement.
As for JPEX, it has repeatedly condemned the investigation. This week, the exchange said it was becoming a DAO and will lock up investor funds for two years as part of a “dividend” scheme.
Got a tip about JPEX or other exchanges in Hong Kong? Contact me at firstname.lastname@example.org.