JPEX cryptocurrency exchange named in 83 complaints to Hong Kong police over virtual assets worth HK$34 million

On Wednesday, the fee issued a warning to potential buyers that JPEX had not filed any licence functions, calling for the general public to be cautious of any alternatives that appeared “too good to be true”.

The watchdog mentioned the buying and selling platform had made false claims that it had obtained licences from abroad regulators, in addition to providing excessive returns on financial savings merchandise.

JPEX additionally relied on deceptive statements made by social media influencers “who are sometimes paid promoters”, the fee added.

The securities regulator has included two JPEX-affiliated firms on its alert record since July final yr, indicating the platform was searching for Hong Kong buyers and not using a correct licence.

Crypto exchange JPEX is misleading investors, Hong Kong’s SFC says

Some customers of the trade have reported points when withdrawing digital property from their on-line accounts within the days after the regulator issued the warning.

One Tether token is price about US$1.

The administrator of the group requested to solely be recognized by his username, @CryptoTraderL, claiming previous threats of harassment, and advised the Submit on Saturday it had obtained about 200 “severe” complaints involving greater than US$10 million in digital property.

“However I imagine it’s solely the tip of the iceberg as a result of, in response to blockchain transaction data, JPEX has greater than 30,000 customers involving greater than US$300 million,” he mentioned.

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He accused the platform of promoting tokens to a rising variety of customers regardless of having a restricted pool of USDT and mentioned unfamiliar buyers might be weak to the thrill generated by social media influencers.

The cryptocurrency trade established a presence in Hong Kong greater than two years in the past and ran aggressive promotion campaigns that included adverts at MTR stations in Central, Mong Kok, Tsim Sha Tsui and Causeway Bay.

Actor-singer Julian Cheung Chi-lam has featured on JPEX publicity supplies as a model ambassador since final August. His agent advised native media they’d by no means agreed to run the marketing campaign earlier than JPEX secured a licence.

Chen has since advised native media that his contract with JPEX resulted in late July.

Know-how lawyer Joshua Chu Kiu-wah, additionally the chief threat officer of blockchain agency XBE, mentioned the JPEX saga underscored the necessity for enhanced consumer schooling and complete regulatory oversight of the sector. The regulators additionally needed to keep forward in using know-how.

“The profitable implementation of superior applied sciences by authorities companies will probably be important in enhancing regulatory capabilities and addressing challenges within the digital jurisdiction, particularly within the context of detecting anomalies like JPEX,” he mentioned.

He suggested customers to do their homework earlier than participating any digital asset buying and selling platform, together with evaluating adverts to keep away from deceptive claims.

In an announcement on Friday, JPEX mentioned a newly fashioned venture crew was nonetheless developing a response technique and “we imagine that the platform won’t collapse”. It additionally shut down its recreation foyer options from midnight on Friday.

The identities and places of JPEX’s house owners stay unclear because of the firm’s opaque company set-up.