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Controversy Rises In Hong Kong During Investigation of Latest Crypto Scandal

source-logo  news.coincu.com 19 September 2023 09:49, UTC

Chief Executive John Lee confirmed that Hong Kong’s police and market regulator would address the recent arrests related to JPEX during a weekly press conference. The scandal has emerged just three months after the launch of a new regulatory regime for digital assets, casting doubts on Hong Kong‘s ambition to become a crypto hub.

The troubles faced by JPEX shine a spotlight on the ongoing regulatory and legal challenges in the crypto world, which has sought to harness the potential of blockchain technology.

The controversy took an unexpected turn as social media influencer Joseph Lam Chok was among the six individuals arrested in connection with JPEX. Lam, a former lawyer turned insurance broker with a significant Instagram following, was detained due to his promotion of the Dubai-based exchange, which was allegedly operating without a license in Hong Kong, according to South China Morning Post.

JPEX had already suspended withdrawals, citing “unfair treatment” by Hong Kong institutions. The Securities and Futures Commission had previously warned the public about JPEX being an unregulated entity, marking the first such case under the new licensing regime. Reports also surfaced, alleging that JPEX imposed exorbitant administration fees, effectively blocking user asset withdrawals.

Over 1,400 complaints were filed against JPEX, totaling HK$1 billion ($128 million), leading to the arrests on charges of “conspiracy to defraud.” Hong Kong regulators aim to protect investors and provide clarity to businesses, but the JPEX scandal underscores the challenges of navigating the rapidly evolving crypto landscape.

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