Hong Kong Authorities Charge 16 in $205M JPEX Cryptocurrency Scandal

TLDR

• Hong Kong charged 16 people in a $205.8M crypto fraud case involving unlicensed platform JPEX.
• Authorities say over 2,700 investors were defrauded by JPEX’s unlicensed operations since 2023.
• Six of the accused allegedly ran JPEX operations; others promoted it or handled crypto trading.
• Interpol issued red notices for 3 suspects believed to have led the fraudulent crypto scheme.
• This case marks the first use of Hong Kong’s anti-money laundering law in a crypto fraud case.

Hong Kong authorities have formally charged 16 individuals in connection with an alleged cryptocurrency fraud operation involving the unlicensed platform JPEX. The suspected scam is reported to have affected over 2,700 investors and resulted in a total loss of approximately HK$1.6 billion ($205.8 million), making it the largest alleged financial fraud in the city’s history.

Charges Filed After Months of Investigation

Police confirmed the charges include conspiracy to defraud, fraudulent inducement to invest, and money laundering. Among those charged is Joseph Lam, a former lawyer turned influencer. He, along with six others, is believed to have promoted the platform and facilitated investments through over-the-counter crypto transactions.

Officials revealed that six of the 16 individuals were central to JPEX’s daily operations. The remaining suspects had varying roles, including promoting the platform to the public and facilitating trades. All 16 individuals are expected to appear in Eastern Court this Thursday.

JPEX Accused of Operating Without a License

Investigators stated that JPEX presented itself as a legitimate digital asset exchange while lacking the required license. Authorities allege the platform misled thousands of investors by advertising services that did not meet regulatory standards in Hong Kong.

The Securities and Futures Commission had previously issued warnings about unlicensed operations in the city. This case marks the first time authorities enforced the Anti-Money Laundering and Counter-Terrorist Financing Ordinance in a crypto-related investigation.

Interpol Issues Red Notices for Three Suspects

International law enforcement has become involved as Interpol issued red notices for three additional suspects. Mok Tsun-ting, Cheung Chon-cheong, and Kwok Ho-lun are believed to have played major roles in the scheme. These notices request global law enforcement to detain the individuals ahead of extradition.

Following the case’s exposure in September 2023, authorities seized HK$228 million related to the alleged fraud. Hong Kong Chief Executive John Lee has since called for improved investor education and tighter licensing rules for crypto platforms operating in the territory.

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