The alleged masterminds behind Hong Kong’s largest financial fraud case remain elusive, with the 11 individuals questioned by local authorities so far appearing unlikely to be central figures in the burgeoning scandal.
As investigators pursue leads in the staggering HK$1.4 billion (US$178 million) case that has sent shockwaves through the city, their focus centres on unravelling the extent of the suspects’ knowledge regarding the inner workings of the JPEX cryptocurrency platform prior to the eruption of allegations.
Additionally, law enforcement agencies are working to ascertain any connections some of the suspects may have had with over-the-counter (OTC) virtual asset money changers.
To date, authorities have received 2,265 complaints from victims, resulting in the arrest of 11 individuals on suspicion of conspiracy to defraud.
In a press conference held at his residence, Joseph distanced himself from JPEX, emphasising that he had severed ties with its business activities and ceased renting a 2,900 sq ft office in Central for his enterprise.
Joseph noted that as of the current moment, law enforcement authorities have not filed any charges against him.
During the press interaction, he opted to refrain from responding to most of the questions posed by reporters.
These inquiries encompassed whether he held a partnership with the JPEX platform, possessed knowledge of other individuals arrested in connection with the case, promoted the platform with an awareness of its potential illegality, or experienced asset freezes.
When questioned about the possibility of offering an apology to JPEX clients, he cited the ongoing police investigation as a constraining factor, limiting his ability to take certain actions at this juncture.
He did acknowledge his intention to assist affected individuals within the bounds of his capabilities and the law once his innocence is established, albeit without delving into specifics.
Joseph acknowledged the significant distress experienced by many individuals, emphasising that his own situation was similarly challenging.
Additionally, he shared that he had experienced restful sleep over the past two days and viewed his time in detention as an opportunity for personal reflection.
Additional arrests include Tsang Cho Shun, the corporate secretary of the JPEX Technical Support Company (now renamed Web 3.0 Technical Support), as well as two other individuals linked to Web3.0 Technical Support: Jason Chan Hiu Ho and Tang Lap Shun.
Authorities are also actively seeking Kwok Ho Lun, the company’s sole director, who may have been recruited to establish the firm.
According to the Companies Registry, Kwok is also the director of CoinLedge Limited and Crypto Wesearch Limited. CoinLedge, a blockchain media company now facing removal from the registry, had previously promoted JPEX.
Wong Ho Pong, director of the Apestaurant Group, which operates the Bored Garden restaurant in Central, is another suspect, offering OTC virtual asset money-changing services.
YouTuber Chu serves as the director of KT Club, with The Acid Limited having acted as the company secretary, a role previously held by CoinLedge’s company secretary until early last year.
Actor and singer Julian Cheung Chi Lam and Malaysian actress Jacqueline Ch’ng Se Min who were questioned by the police last Thursday, were not arrested.
That goes for Feng Shui master and TV host Clement Chan Ting Bong.
It has also come to light that a company operating under the name “JP-EX Crypto Asset Platform Pty Ltd” and registered in Australia initiated the process of voluntary re-registration with the Australian Securities and Investments Commission. This move occurred just one day subsequent to the arrest of the initial eight individuals in Hong Kong linked to the JPEX case.
Per information provided by the commission, this company, established in 2020, reported assets valuing at less than A$1,000 (US$647).
The company’s present director, a 32-year-old named Chen Jieyi hailing from Guangdong province, currently oversees its operations.
Notably, the firm was originally registered by its prior director, a 28-year-old individual named Cheung Sze Ki from Hong Kong. Cheung subsequently transferred ownership to Chen in 2021.
The ongoing investigation into this complex case is far from concluded, with the possibility of additional arrests looming on the horizon.
In a bid to unravel the intricacies of the situation, law enforcement agencies are actively exploring international cooperation, including seeking assistance from Interpol.
This pursuit is driven by the identification of digital coin transfers associated with the platform, underscoring the global nature of this evolving crypto scandal.
Angelina Kwan, a former Securities and Futures Commission (SFC) regulator and current Chief Executive Officer of Hong Kong-based regulatory consultancy Stratford Finance, sheds light on Hong Kong’s approach to retail cryptocurrency exchanges.
The city has adopted a stance of permitting such exchanges while implementing rigorous protective measures.
The recent enforcement actions serve as tangible evidence of Hong Kong’s resolute commitment to penalise entities engaged in malicious or illicit practices.
When asked about the process for asset recovery for the JPEX scandal, she went into detail:
“[The International Organization of Securities Commissions] (IOSCO) is actually promulgating more and more calls together. I can’t speak for sure, but Hong Kong and Australia, as well as anywhere else that they’re operating, already have had calls about it to see what assets are in those countries that can be frozen to make sure that at least this HK$1.2 billion or US$124 million can be recovered and aggrieved investors can get their money back. That’s going to be a bit of an arduous process. I am glad that HK$1.2 billion is the largest amount Hong Kong has had. You have seen what happened with FTX. They were not regulated in Hong Kong. They were regulated in the Bahamas. It’s been very difficult for investors in Hong Kong to actually collect their assets that are in the Bahamas or in FTX. But at least if they’re regulated, if something goes terribly wrong, Hong Kong regulators can actually close or cease their trading and actually hold on to the assets. That’s why regulation is so important for the digital asset industry to grow and to survive, because only by regulation can we actually grow and truly morph into a proper asset class, which is one of the reasons why we’ve been pushing for licensing and the watershed to happen.”