The biggest financial fraud in Hong Kong's history is looming large, with Hong Kong authorities scrambling to deal with the situation, which many consider to be the biggest financial fraud in the city's history.
JPEX, based in Dubai, was established in 2019 and has been operating in Hong Kong since July 2020. Hong Kong's Hong Kong office has been raided earlier this month, trapping millions of investors' crypto.
Its collapse has been compared to FTX, but the unravelling of JPEX in Hong Kong has several key differences. It's not clear who runs it, for one thing. And few industry analysts had heard of JPEX before, beyond its city-wide advertising campaigns.
As authorities rush to find the missing - and so far unknown - culprits and appease angry investors, the impact has been far-reaching in the crypto-friendly Asian hub. According to the government, more than 2,300 people have been killed and 2,300 are believed to have been killed.
The JPEX scandal has led authorities to shut down numerous crypto shops that were particularly popular with visitors from mainland China.
On September 13 Hong Kong's securities and futures Commission warned the public that JPEX would not be licensed to operate in the region and outlined alleged violations of sections of the Anti-Money Laundering and counter-terrorism Financing Ordinance.
On September 17, JPEX blamed third-party market makers for its liquidity crisis and its subsequent fee hike. The company has vowed to return everything to normal.
alongside Chok, two YouTubers - Chan Wing-yee and Chu Ka-fai - were arrested.
John Lee, chief executive of Hong Kong, highlighted the importance of firms complying with licensing regulations.
Only four exchanges have applied for licences ahead of a 2024 expiration date: HKBitEx, Hong Kong BGE, HKVAX, and Victory.
Tyler Pearson is a researcher at DL News. He is based in Alberta, Canada.