JPEX fraud snares 1,641 investors with HK$1.2 billion of funds, as cryptocurrency platform tests Hong Kong’s police and regulator

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The financial toll in Hong Kong’s cryptocurrency scandal has risen to HK$1.2 billion (US$154 million) involving over 1,600 investors, with the biggest victim sinking HK$40 million into JPEX’s scam, police said at a press conference on Tuesday. The police received complaints from 1,641 investors as of 10.30pm Monday, involving HK$1.19 billion in assets, the Hong Kong commercial crime bureau’s acting chief inspector Mak Wai-kwong said at the joint press conference with the city’s securities watchdog agency. The case, a little more than three months after a new virtual asset regulatory framework came into effect, is a major test of Hong Kong’s ability to balance investor protection with the city’s ambition as a fintech hub and to keep up with the fast-growing world of cryptocurrency. The city’s police arrested eight people in connection with investigations into alleged fraud at JPEX, Mak said. Bank accounts with HK$15 million were frozen, and three properties valued at HK$44 million were seized, he said. The amount of loss and the number of victims are “astonishing”, and the case involves mostly “inexperienced” cryptocurrency investors who have no understanding of the products they are investing in, the bureau’s senior superintendent Kung Hing-fun said. Investors fell for JPEX’s promises of high yields even though the stories were “too good to be true,” she said. More to follow …

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