Former lawyer and cryptocurrency influencer Joseph Lam has been arrested by Hong Kong police over his alleged ties to embattled cryptocurrency exchange JPEX. a local media reportCiting people familiar with the matter, police arrested Carrie Lam on Monday, September 18.
JPEX and influencers falsely promote unregistered products
Lam’s arrest comes as Hong Kong authorities launch an intense investigation into the JPEX exchange amid a liquidity crunch. Police reportedly raided his office and confiscated boxes containing evidence linking Liam to JPEX.
Meanwhile, the influencer told his more than 190,000 Instagram followers on Saturday that he visited police on Friday. He said he provided information about the encryption platform to police. Additionally, he urged those affected by JPEX’s liquidity crunch to call the police hotline to report losses.
Police are investigating cryptocurrency exchanges following a warning from Hong Kong’s Securities and Futures Commission (SFC). On September 13, the China Securities Regulatory Commission explain The exchange used social media influencers to illegally market its products and services to the public.
Additionally, the regulator accused JPEX and its influencers of falsely portraying the platform as an exchange officially registered in Hong Kong. Additionally, regulators warn investors to be cautious about investment opportunities that appear misleading or overly attractive.
JPEX halts operations citing liquidity challenges
JPEX has suspended trading activity on its platform following an SEC investigation. In a blog post on September 17, Announce It plans to cease some operations, citing liquidity issues with third-party market makers.
it states:
Recently, due to the unfair treatment of JPEX by relevant Hong Kong institutions, […]Waiting for a series of negative news, our cooperative third-party market maker was maliciously freezing funds.
According to the exchange, market makers have restricted its liquidity and significantly increased operating costs, leading to operational challenges. As a result, it has increased withdrawal fees and plans to readjust them once the situation returns to normal.
Additionally, it revealed plans to remove all trading from the Earn Trading interface by Monday, September 18. Therefore, users can no longer place new Earn orders. However, it will allow existing earning orders to continue but only earn rewards until the end date.
Meanwhile, on Saturday, Hong Kong police explain It received more than 83 complaints about JPEX, which has assets worth $4.3 million. Some users complained about difficulties in withdrawing funds, and large amounts of funds were withheld as handling fees on JPEX.
according to ReportPolice Commissioner Siu Zell said the Securities and Futures Commission had submitted a report on the suspected fraud. He added that the Commercial Crime Bureau was investigating the matter and police encouraged other victims to lodge complaints.
Featured images from Pixabay and charts from TradingView.com
