The Hong Kong police disclosed the operational model and promotional methods of JPEX, announcing five major elements suspected of fraud
ChainCatcher news, according to the Hong Kong Wen Wei Po report, the Hong Kong SAR government police and the Securities and Futures Commission held a joint press conference yesterday to announce the JPEX case. The police summarized the operation model and promotional methods of the virtual asset trading platform JPEX, stating that five elements constitute the suspected fraud:
JPEX has not applied for or held a license from the Securities and Futures Commission, yet claims on its website to be "a licensed and recognized digital asset and virtual currency platform," and has heavily promoted itself through advertisements, media, over-the-counter (OTC) exchanges, and influencers to create popularity and attract investors.
Influencers made false and misleading statements online, flaunting wealth to create the appearance of "getting rich by buying coins" to increase persuasion. However, since the Securities and Futures Commission had previously issued warning letters to relevant individuals and physical stores, there is reason to believe that the parties involved were aware of JPEX's illegal practices but still promoted it to customers.
After registering as JPEX users, individuals could exchange different cryptocurrencies on the platform or transfer virtual assets to JPEX accounts from foreign platforms for trading. However, investigations revealed that JPEX also issued a virtual currency called JPC, which is different from other mainstream cryptocurrencies: JPC cannot be traded on other platforms and cannot be used for payment purposes. Some victims were persuaded to purchase JPC and use it in a so-called "staking" method similar to fixed deposits, receiving extremely high returns only after the staking period ended. JPEX also required customers to provide the private keys of their cryptocurrencies for safekeeping, effectively allowing JPEX to control users' assets.
After being warned by the Securities and Futures Commission, JPEX arbitrarily set a withdrawal limit of $1,000 for users and charged a $999 fee, effectively restricting asset withdrawals.
By the early morning of the 18th, JPEX had removed all financial trading services from its website.
