Hong Kong Charges Crypto Influencers in JPEX Fraud Case

Hong Kong prosecutors formally charged multiple individuals connected to the defunct crypto exchange JPEX on Wednesday, in what represents one of the most significant regulatory crackdowns since the platform’s collapse. The enforcement action targets not only the core operators but also the influencers who allegedly promoted the exchange to the public. Among those charged are Joseph Lam Chok, a lawyer who transitioned into crypto influencing, and Chan Yee, a prominent key opinion leader (KOL) in the cryptocurrency community.

The charges extend beyond the influencers themselves. Prosecutors have also charged six core members of the alleged JPEX group, seven operators of over-the-counter crypto shops, and three individuals accused of serving as front account holders. This comprehensive approach suggests authorities are targeting the entire ecosystem that supported JPEX’s operations, from leadership to distribution channels and financial infrastructure.

The charges fall under Hong Kong’s Anti-Money Laundering Ordinance, which specifically prohibits fraudulently or recklessly inducing others to invest in cryptocurrency. Prosecutors allege that the influencers promoted JPEX while either knowing or deliberately ignoring that the platform had no approval to operate in Hong Kong. This legal framework provides authorities with powerful tools to pursue those who mislead investors in the crypto space.

The case against the influencers centers on their promotional activities, which prosecutors claim constituted reckless investment inducement. By leveraging their social media platforms and public profiles, these individuals allegedly directed followers to invest in an unlicensed exchange, creating significant financial risk for investors who trusted their endorsements. The timing of these charges, coming after the exchange’s collapse, underscores the serious consequences of such promotional activities.

This enforcement action signals Hong Kong’s increasingly tough stance on cryptocurrency regulation, particularly regarding influencer marketing and celebrity endorsements. The case has been described by some observers as involving ‘Hong Kong’s FTX,’ drawing parallels to the high-profile collapse of the global crypto exchange that also involved prominent endorsements and regulatory failures.

The timing of these charges coincides with broader regional developments in crypto regulation. While Hong Kong pursues enforcement actions against unlicensed operators, the Philippines senate is considering putting government budget on blockchain, demonstrating the varied approaches Asian jurisdictions are taking toward cryptocurrency integration and regulation. This contrast highlights the regulatory divergence emerging across the region.

The JPEX case represents a watershed moment for crypto regulation in Hong Kong, establishing clear legal precedent for holding influencers accountable for their promotional activities. As regulators worldwide grapple with how to oversee the rapidly evolving cryptocurrency sector, this enforcement action provides a template for how jurisdictions might approach similar cases involving unlicensed exchanges and their promoters.