20th September 2023 – (Hong Kong) The police arrested three additional male suspects today, aged between 25 and 32, on suspicion of “conspiracy to commit fraud.” The three individuals are currently under detention for further investigation. With these latest arrests, the total number of individuals apprehended in connection with the case has reached 11. The police investigation is still ongoing, and it is not ruled out that more arrests may occur.
According to the police, as of 5pm on the 20th, a total of 2,086 victims have reported cases, involving an estimated amount of HK$1.3 billion, making it the largest fraud case ever recorded in Hong Kong. The police had previously apprehended eight individuals on charges of “conspiracy to defraud,” including JPEX employees and two social media influencers who had actively promoted the company’s platform. The arrested individuals, ranging in age from 22 to 52, were identified as the proprietors of over-the-counter virtual asset money changers, as well as key personnel and staff members of certain cryptocurrency companies, as stated by the police on Tuesday. All individuals were arrested on charges of conspiracy to defraud.
Among those apprehended were social media influencers Joseph Lam Chok and Chan Hoi-yee, who had been actively endorsing JPEX.
Furthermore, the police received an alarming number of 1,641 complaints regarding JPEX, with the total amount of money involved reaching HK$1.19 billion as of yesterday.
During the operation, law enforcement officers conducted searches at over 20 premises and over-the-counter shops, resulting in the seizure of HK$8 million in cash, luxury handbags, jewellery, and the freezing of deposits totalling HK$15 million, along with three properties valued at HK$44 million.
Meanwhile, the Securities and Futures Commission (SFC) has issued a statement this evening in response to the public interest surrounding the suspicious practices and activities of JPEX, as well as certain false and misleading claims made by the company regarding its communication with the SFC.
The SFC expresses deep regret over JPEX’s public disclosure of confidential correspondence between the SFC’s Enforcement Division and JPEX, which violates the secrecy and confidentiality provisions of the Securities and Futures Ordinance (SFO) and the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO).
JPEX presents itself as an unregulated virtual asset trading platform and has been under the SFC’s scrutiny since March 2022, when the SFC initiated inquiries into its suspected false and misleading representations and unlicensed activities. Due to JPEX’s lack of cooperation and failure to substantively respond to the SFC’s requests for information, the SFC placed JPEX on its Alert List in July 2022.
The confidential correspondence disclosed by JPEX on its website was part of the SFC’s ongoing inquiries and investigations into JPEX.
The SFC clarifies that JPEX has never approached them regarding any potential licence application, and no entity within the JPEX group is licensed or has applied for a licence to operate a virtual asset trading platform in Hong Kong. Consequently, there has been no communication between the SFC and JPEX regarding licensing matters. Based on subsequent information obtained, suspicions of fraud arose, leading the SFC to refer the matter to the police. As the investigations are still ongoing, the SFC refrains from making further comments at this stage.
JPEX’s disclosure of confidential correspondence violates section 378 of the SFO and section 76B of the AMLO, which require anyone assisting the SFC in a statutory inquiry or investigation to maintain secrecy and confidentiality regarding any information acquired.
Since then, the SFC and the Investor and Financial Education Council have jointly issued investor alerts on their respective websites, social media platforms, and through TV/radio channels on at least nine occasions, cautioning against engaging with unlicensed platforms and related malpractices, until the public statement naming JPEX again on 13th September, 2023.
