Hong Kong police have charged 16 individuals in connection with an alleged fraud scandal surrounding cryptocurrency trading platform JPEX, more than two years after the force began investigating.
The Police Commercial Crime Bureau announced on Wednesday that the 16 people included core members of JPEX, individuals in charge of over-the-counter (OTC) cryptocurrency exchanges, social media influencers, and nominee account holders.
The case will be mentioned at Eastern Magistrates’ Courts on Thursday morning.
Six core members were charged with conspiracy to defraud, money laundering, and perverting the course of justice.
Police also invoked for the first time the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, updated in 2022, to prosecute the six individuals – key players in the exchange platform – with the offence of “fraudulently or recklessly inducing others to invest in virtual assets.”
Seven influencers and OTC trading house operators were charged with fraud, money laundering, and fraudulently or recklessly inducing others to invest in virtual assets. Three nominee account holders face money laundering charges.
Police said on Wednesday that Interpol has issued a Red Notice for three men believed to be key players in the JPEX case who have fled the city: 27-year-old Mok Tsun-ting, 30-year-old Cheung Chon-cheng, and 28-year-old Kwok Ho-lun.
The Red Notice requires law enforcement around the world to locate and provisionally arrest a person pending extradition, surrender, or similar legal action. It is not an international arrest warrant, according to the Interpol website.
Citing unnamed sources, local media said that influencer Joseph Lam and YouTuber Chan Wing-yee – known as “Chan Yee” – were among the 16 charged.
Police alleged that JPEX, which began operating in 2020, placed “ubiquitous” ads around the city to advertise itself as a crypto exchange platform with low risks and high returns. OTC trading houses and influencers helped promote the platform and 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. The suspects transferred customers’ assets away and laundered the money through multiple crypto wallets.
Some of the suspects had bought luxury cars or possessed a large amount of cash, which did not match their income, police alleged.
The break in the city’s largest cryptocurrency scandal came more than two years after initial arrests were made in September 2023. So far, 80 people have been apprehended, while more than 2,700 people have come forward as victims in the case. Their losses exceeded HK$1.6 billion.
With Wednesday’s charges, 64 individuals are still under investigation and unprosecuted, including eight people whom the police identified earlier as core members of the syndicate.
Chief Superintendent Ernest Wong said at a press conference on Wednesday that the JPEX case was “very complicated,” requiring officers to scrutinise “massive amounts of data and transaction records.” The police needed time to conduct forensic checks on electronic devices seized in the case before identifying key evidence to press charges.
They also had to collaborate with experts from different fields, as well as the Securities and Futures Commission, which flagged JPEX’s “suspicious practices” and declared it unregulated in 2023, in the two-year-long probe.
“At the moment, we are finishing the first round of examination of our evidence. After consultation with the Department of Justice, we decided to charge 16 people in court. We will continue our investigation, and we cannot eliminate the chance that we will prosecute or arrest more people,” Wong said.
The JPEX case has cast a shadow over Hong Kong’s embrace of digital assets and revealed regulatory gaps just months after the city rolled out rules requiring crypto exchanges to be licensed and meet investor protection standards.
