The virtual currency platform JPEX is embroiled in a conspiracy fraud case, with the Hong Kong police receiving reports from a total of 2,265 individuals, bringing the total amount involved to approximately HKD 1.4 billion.
Hong Kong Web3.0 Association member and Legislative Council member Jiezhuang Wu cited data from more than 50,000 hot wallet blockchain addresses closely associated with JPEX. The analysis revealed that since last Wednesday when the Securities and Futures Commission issued a warning against JPEX for operating without a license, at least virtual currencies equivalent to around HKD 167 million have been transferred out of the JPEX platform as of September 22nd. This includes approximately HKD 2.63 million worth of BTC, HKD 20.8 million worth of ETH, HKD 13.6 million worth of USDT, and over HKD 100 million worth of USDC. Most of these transfers occurred on Monday or later.
Some virtual currency fraud analysis consultants believe that JPEX significantly increased its transaction fees over the past week, and they suspect that the funds being withdrawn are not from retail investors. The unusual flow of funds may be orchestrated by “whales” or large players. It is understood that the police will investigate the flow of funds, collaborate with financial institutions to trace the proceeds of crime, and explore whether there is any involvement in money laundering or other criminal activities. They will also seek assistance from overseas law enforcement agencies if necessary.
Previously, JPEX proposed a “DAO Stakeholder Dividend Plan” and reported that on the first day of the voting, 70% of participating users had agreed to the proposal. According to this plan, the platform will distribute 49% of the dividends to DAO stakeholders, and existing users can exchange their assets currently held on the platform for DAO stakeholder dividends at a 1:1 ratio. Users had the opportunity to participate in the voting until September 21, 2023, to decide whether to implement the plan. JPEX will continue to operate normally until the completion of the vote and the announcement of the results.
Hong Kong Legislative Council member Zhenshi Huang has cautioned that under the proposed scheme, investors can receive a maximum dividend of only 49%. This means that JPEX still holds significant decision-making power. Investors should be especially mindful that transitioning from creditors to shareholders does not necessarily guarantee the retrieval of their invested funds. In the event of company debt, users may find themselves liable for those debts.