ChainCatcher news, according to Hong Kong media reports, JPEX is suspected of violating regulations by promoting and operating in Hong Kong. The first civil lawsuit involves two plaintiffs seeking to recover 240,000 Tether or 1.85 million Hong Kong dollars from JPEX Group and a total of 7 defendants. One of the defendants, a JPEX registered company in Hong Kong, was absent from last month's hearing. Judge Zhou Zhaowen issued a ruling yesterday stating that the company, as an operator, holds assets and constitutes an express trust but has violated its responsibilities. Particularly, the case of the first plaintiff is evidently strong, thus the judge ordered the company to compensate at the request of the two individuals.According to the statement of claim, the first defendant, a company registered in Australia under JPEX, operates the JPEX virtual asset service and electronic platform. The plaintiffs personally or in their name deposited virtual currency into the platform account, and they request the court to rule that the second defendant has violated good faith and/or must restructure and repay debts. The judge also stated that in many common law jurisdictions, including Hong Kong, courts accept that cryptocurrency is considered "property" and can form a trust.The judge recognized that the two defendants operate a cryptocurrency trading platform, which records the movement of currency between accounts, involving trustee benefits and various agreement terms. Therefore, the defendants, as trustees, violated their responsibilities by transferring assets without authorization.

ChainCatcher news, according to reports from the Hong Kong Economic Journal, lawyer Chan Ting-kin, who specializes in financial market regulation and virtual assets in Hong Kong, stated that at this stage, Hong Kong users of JPEX may face certain difficulties if they consider civil claims. The current challenge is that it is unclear which legal entity holds the customer assets of JPEX, and the registration location of that legal entity is also unknown. Once JPEX collapses, referring to the liquidation process of the unlicensed virtual asset trading platform Gatecoin registered in Hong Kong in the past, the process must orderly distribute the platform's assets to creditors, and the type of creditors for users largely depends on the terms between the platform and the users.Since JPEX is not licensed in Hong Kong, if the terms do not clearly establish a trust relationship between the exchange and the users, the deposits held by the exchange may likely be regarded as the exchange's assets during the liquidation process. This means that users would be considered unsecured creditors, and in the priority order of asset distribution during liquidation, they would rank behind secured creditors, liquidation costs, priority payments, and floating charge creditors, specifically in fifth place.