The police have arrested internet celebrities Zuo Lin and Chen Yi on suspicion of their involvement in the JPEX case, a virtual asset trading platform named by the Hong Kong Securities and Futures Commission. Reports suggest that the police had also identified another entertainer, but they were unable to make an arrest as the individual was not in Hong Kong.
JPEX had previously been named by the Hong Kong Securities and Futures Commission for operating without a license. The police received a referral from the Commission on September 14th and, after conducting an investigation, arrested four men and two women in different areas on suspicion of “conspiracy to defraud.” They are currently in detention pending further investigation.
The police have revealed that they have received reports from a total of 1,408 people related to this case, with an estimated amount of approximately 1 billion Hong Kong dollars involved.
Vincent Chan, a lawyer specializing in financial market regulation and virtual assets in Hong Kong, mentioned that it might be challenging for JPEX's Hong Kong users to pursue civil claims at this stage. The current challenge lies in not knowing which legal entity held the client assets for JPEX and where this legal entity is registered. If JPEX were to collapse, the process would involve orderly distribution of platform assets to creditors, with the types of claims depending largely on the terms between the platform and its users, following a procedure similar to the liquidation process seen in the case of the unlicensed virtual asset trading platform Gatecoin previously registered in Hong Kong.