Two individuals have filed a civil claim against Hong Kong-based cryptocurrency exchange JPEX, seeking to recover over HK$1.85 million. This lawsuit is the first civil action related to an alleged fraud case involving more than 2,600 victims with total losses amounting to HK$1.6 billion. A lawmaker indicated that ten more victims plan to take similar legal actions.
Filing Lawsuit over Missing Funds
The plaintiffs, Chan Wing-yan and Herbert Lam, filed a writ of summons in District Court against seven defendants, including JP-EX Crypto Asset Platform and Web 3.0 Technical Support. These companies allegedly provided virtual asset services under the JPEX brand since 2021.
Felix Chiu, a virtual asset manager at over-the-counter crypto exchange Coingaroo, and unidentified holders of three JPEX wallets are also named as defendants. According to the legal documents, Wing-yan registered two accounts with JPEX in July and August last year and opened a third account in Lam’s name.
Wing-yan’s decision was influenced by seminars and promotional materials from social media influencer Joseph Lam, who claimed to be a partner of JPEXand was arrested in September over conspiracy to defraud but has not been charged.
During this period, Wing-yan transferred HK$850,000 and paid an additional HK$1 million in cash to Chiu to purchase Tether cryptocurrency (USDT) for her JPEX accounts. She also transferred 6219.6 USDT (HK$48,575) from another cryptocurrency platform to JPEX. The total deposits amounted to 247,498 USDT (HK$1.93 million).
First Civil Lawsuit Filed Against #Crypto Exchange #JPEX for Alleged Fraud #NewsBytes https://t.co/9YFCJ1OZrV
— Bitcoin.com News (@BTCTN) June 5, 2024
Police Report 73 Arrests
The plaintiffs allege they were unable to withdraw their assets after JPEX imposed a 99 percent withdrawal fee last September when theSecurities and Futures Commission identified JPEX as unlicensed. They discovered their assets had been transferred to unknown wallets shortly after each deposit, leaving their accounts nearly empty.
The plaintiffs also stated they lacked access to the private keys necessary to manage their crypto-assets, which were controlled by the defendants.
They have lodged three alternative claims, one seeking to recover about 226,013 USDT allegedly converted into other cryptocurrencies without authorization. They have also requested the court to trace the assets and issue an injunction to prevent the defendants from dealing with them.
Police reported that 73 individuals had been arrested in connection to the JPEX scandal, all of whom were granted bail and must report to the police regularly.
This article was written by Tareq Sikder at www.financemagnates.com.
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