Former lawyer and crypto influencer Joseph Lam has been apprehended by the Hong Kong Police for allegedly associating with troubled cryptocurrency exchange JPEX. According to a local media outlet’s report, Lam was arrested on Monday, September 18. This arrest comes amidst a heated investigation by Hong Kong authorities into the JPEX exchange following its liquidity crunch. The police raided Lam’s office and seized boxes containing evidence of his connection to JPEX.
In a statement to his Instagram followers, Lam revealed that he had visited the police to provide them with information about the crypto platform and urged those affected by JPEX’s liquidity issues to report their losses to a police hotline.
The investigation into the exchange was initiated by the Hong Kong Securities and Futures Commission (SFC), which accused JPEX and its influencers of illegally promoting unregistered products and services on social media. The SFC also warned investors to be cautious about misleading or too appealing investment opportunities.
JPEX has responded to the investigation by halting its trading activities, citing liquidity challenges with third-party market makers. It disclosed plans to delist all transactions from its Earn Trading interface and increased withdrawal fees temporarily. The exchange stated that the market makers had restricted its liquidity and significantly increased operating costs, causing operational difficulties.
The Hong Kong police have received over 83 complaints about JPEX, with users reporting difficulties in withdrawing funds and large sums being held back as processing fees. Raymond Siu Chak-yee, the police commissioner, confirmed that the SFC had filed a report over suspected fraud, and the Commercial Crime Bureau is currently investigating the matter.
It is crucial for investors to exercise caution and due diligence when engaging with cryptocurrency exchanges. The rise of social media influencers promoting crypto platforms highlights the need for tighter regulations to protect investors from potential scams.
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