Hong Kong Charges 16 in $205 Million JPEX Crypto Fraud Case — City’s Largest-Ever Crypto Prosecution

Hong Kong authorities have formally charged 16 individuals, including influencer and former barrister Joseph Lam Chok, over their alleged involvement in the HK$1.6 billion JPEX cryptocurrency fraud, which is considered to be one of the city’s largest financial crime cases to date.

The defendants — 12 men and 4 women — face accusations of fraud, conspiracy to defraud, and money laundering under Hong Kong’s Anti-Money Laundering and Counter-Terrorist Financing Ordinance, following a two-year probe into the unlicensed exchange.

According to police, more than 2,700 investors were defrauded through a sprawling network of social media promoters and over-the-counter (OTC) crypto shops, which funneled customer deposits into JPEX’s unregulated trading platform.

Police say the group conspired to lure retail investors with promises of high returns on virtual assets before misappropriating funds through complex laundering channels.

Lam, a former lawyer turned influencer, was among several social media personalities arrested in September 2023 after promoting JPEX to his followers. His arrest came shortly after the Securities and Futures Commission (SFC) issued a warning that the Dubai-based exchange was unlicensed and misleading investors — sparking mass reports of frozen withdrawals and triggering one of Hong Kong’s biggest-ever crypto fraud investigations.

80 Arrests, $28 Million Seized, and Interpol on the Trail

Since the start of the investigation, authorities have arrested more than 80 suspects, seized HK$228 million (US$28 million) in assets — including HK$14.5 million in crypto, real estate, luxury cars, and cash — and issued Interpol red notices for three alleged ringleaders still at large.

Chief Superintendent Ernest Wong Chun-yue of the Commercial Crime Bureau said Interpol is actively pursuing two ringleaders and one core member, while Hong Kong police continue to track the remaining network.

According to Senior Superintendent Fanny Kung Hing-fun, some suspects fled the city before arrests began, further complicating asset recovery.

Legal experts view this case as a turning point for Hong Kong’s Web3 sector; Joshua Chu, lawyer, lecturer, and co-chair of the Hong Kong Web3 Association, described the prosecution as “straightforward” under section 53ZRG of Hong Kong’s anti-money laundering ordinance (AMLO) — which leaves “no ambiguity” regarding liability for those who promote false claims about unlicensed entities.

“KOLs who repeatedly promoted false claims about JPEX’s legitimacy, despite explicit SFC warnings, expose themselves to liability whether they knowingly spread misinformation or simply failed to perform basic due diligence.”

After his release on bail in 2023, Lam had shown that he had no remorse for the things that he done, even telling reporters that he had "slept well". Chu criticized the remark as showing a “lack of contrition or empathy” for victims — behavior that could weigh against him at sentencing.

He added that Lam’s defense team’s failure to engage meaningfully with authorities deprived victims of potential avenues for redress. But Chu warned that the prosecution represents “only the tip of the iceberg,” noting that investigators are still uncovering deeper transactional layers and a broader network of perpetrators.

A Test for Hong Kong’s New Crypto Regulatory Regime

The JPEX case also marks the first major prosecution under Hong Kong’s enhanced anti-money laundering framework and comes as the city tightens oversight of virtual asset platforms. The Securities and Futures Commission has since introduced stricter custody requirements, licensing standards, and public transparency measures for all crypto exchanges operating in Hong Kong.

Chief Executive John Lee Ka-chiu endorsed the SFC’s move to publish a public list of licensed and pending exchanges, saying “clear information will assist investors in making informed decisions.”

So far, about 11 platforms — including HashKey, OSL, HKVAX, Bullish, and HKBitEx — have received licenses to serve retail customers. Meanwhile, Bybit and Crypto.com have pending applications filed in June 2025 and February 2024, respectively.

Rebuilding Trust in the Wake of Scandal

Despite the sweeping arrests, legal experts caution that victims’ recovery prospects remain limited. Chu said restitution “will depend not merely on criminal convictions, but on tracing asset flows,” adding that “the best chance for compensation lies in linking claims directly to JPEX’s core assets rather than dispersed funds held by promoters.”

For Hong Kong, the JPEX scandal serves as both a warning and a catalyst — underscoring the risks of unregulated crypto promotion while accelerating the government’s push toward a more transparent, compliant digital asset ecosystem.