Following an investigation into the liquidity crisis at cryptocurrency exchange JPEX, a Hong Kong social media influencer has reportedly been arrested for his alleged involvement.
According to the South China Morning Post, Hong Kong police reportedly arrested cryptocurrency influencer Joseph Lam, whose username is “jolamchok” on Instagram, for his ties to JPEX. Additionally, reports indicate that police raided his office and seized boxes of evidence, including a plastic bag containing banknotes.
According to local reports, the Hong Kong Securities and Futures Commission recently issued a statement accusing JPEX of actively promoting the platform’s services and products to the Hong Kong public through Internet celebrities and over-the-counter currency exchangers.
Another unconfirmed report suggests that Linzo proposed a “proposal” to a chat group created for cryptocurrency investments. One of the victims, Ms. Chen, was reportedly persuaded to invest US$12,800 (HK$100,000) in cryptocurrency investments.
However, Lam did not immediately respond to Cointelegraph’s request for comment confirming or denying the allegations. According to reports:
“He (Lin Zuo) claims in the group from time to time that someone has been asking him to ‘pay’, and threatens that ‘the money in the past two days has been five times the usual amount’.”
On September 17, the internet celebrity shared a news article claiming that he was “not hit by the JPEX incident” and captioned it, “Whatever doesn’t kill you makes you stronger.”
The development came before Mr Zuo and his lawyer went to the police to provide the necessary information.
JPEX blamed regulators and “third-party market makers” for the liquidity crisis, which led to the platform raising withdrawal fees and suspending certain operations. “We are committed to restoring liquidity from third-party market makers as soon as possible and gradually adjusting withdrawal fees to normal levels,” JPEX said in a statement, noting that details would be announced after the negotiations conclude.
related: Binance CEO dismisses negative sentiment, assures company has “no liquidity issues”
A recent report from cryptocurrency exchange Bitfinex revealed that capital outflows from the crypto industry reached $55 billion in August.
The cryptocurrency market has lost approximately $55 billion over the past month, with capital outflows affecting not only Bitcoin (BTC) but also Ethereum (ETH) and stablecoin liquidity.
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