Hong Kong’s long-running JPEX cryptocurrency scandal sees more updates from the enforcement agencies as more than two years after the first arrests, the police have charged 16 people. This includes influencer Joseph Lam Chok, with fraud, money laundering, and inducing investment in unlicensed virtual asset products.
Interpol has issued Red Notices for three other suspects believed to have fled the city. According to investigators, JPEX marketed itself as a low-risk exchange but used over-the-counter (OTC) operators and social media influencers to attract investors, who later found themselves unable to withdraw funds.
More than 2,700 victims lost an estimated HK$1.6 billion (US$205 million), a staggering figure that dwarfs previous cases in Hong Kong’s fintech sector.
From promotion to prosecution
JPEX began operations in 2020, flooding Hong Kong’s streets with billboards promising “safe and easy” crypto profits. Regulators later confirmed the platform was never licensed under the city’s new virtual asset regime.
In 2023, as users reported withdrawal delays, fees spiked to 999 Tether, effectively locking funds. By September that year, police had arrested 11 individuals, including YouTubers Chan Wing-yee (“Chan Yee”) and Chu Ka-fai, who promoted JPEX to their followers.
Authorities allege that JPEX’s operators laundered proceeds through multiple wallets, converting crypto into cash, cars, and offshore accounts. The investigation has since widened to 80 arrests, and police say they have seized HK$228 million.
Chief Superintendent Ernest Wong Chun-yue described the probe as “highly complex,” involving data analysis, digital forensics, and collaboration with the Securities and Futures Commission, which had previously flagged JPEX as unregulated.
The fall of Joseph Lam: from influencer to defendant
Once known for his bold lifestyle and social media following, Joseph Lam Chok became the public face of Hong Kong’s crypto boom, and now, its biggest cautionary tale.
A former insurance agent turned influencer, Lam promoted JPEX as a “safe and high-yield” crypto exchange to his large online audience. His endorsements, combined with the platform’s flashy marketing campaigns across Hong Kong’s skyline, helped lure thousands of retail investors into the platform.
Now, Lam stands accused of fraudulently inducing investment and laundering funds, charges that mark a sharp reversal from his image as a crypto success story. Local reports say police traced luxury purchases and unexplained cash flows back to Lam and other promoters, raising questions about influencer accountability in Hong Kong’s digital asset scene.
His prosecution may set a precedent, not just for unlicensed exchanges but also for the social media personalities who profit from promoting them.
Hong Kong and the global laundering network
The timing of Hong Kong’s crackdown aligns with a wider international push against crypto-based money laundering. Yesterday, the U.S. Treasury sanctioned eight individuals and two entities tied to North Korea’s cybercrime operations, including the First Credit Bank and Korea Mangyongdae Computer Technology Company (KMCTC), both accused of laundering cryptocurrency for the regime’s weapons program.
North Korean hackers have stolen over $3 billion in crypto over the past three years, using fake identities, IT-worker schemes, and proxy accounts to funnel money through exchanges and shell firms, methods echoing Hong Kong’s JPEX OTC network.
Calls for global AML coordination are no longer theoretical, they’re becoming a survival requirement for crypto’s next chapter.
The road ahead: stronger oversight, fewer loopholes
Hong Kong’s Anti-Money Laundering and Counter-Terrorist Financing Ordinance, updated in 2022, was invoked for the first time in the JPEX charges. The law allows regulators to prosecute those who “fraudulently or recklessly induce others to invest in virtual assets.”
Analysts say this case will likely shape how Asia enforces future AML and investor-protection measures, especially as other jurisdictions, from the EU’s MiCA framework to the U.S. Treasury’s GENIUS Act, move toward stricter identity verification, transaction monitoring, and exchange licensing.
Also read: Suspected Chinese Crypto Fraud Fugitive Arrested in Bangkok
