Crypto firm victims press government to take action

Alleged victims of JPEX cryptocurrency platform - numbering at least 8,000 according to a lawmaker - are urging the government to intervene.

Around 30 of them, involving investment capital of more than HK$100 million, sought help from Election Committee lawmaker Johnny Ng Kit-chong, who described the incident as another London Gold scam, in which fraudsters lured victims with high-return, low-risk sales pitches.

One victim, Jenny, said she lost a six-digit sum and never received any profit since joining the platform in March.

Jenny was convinced by an over-the-counter virtual asset money changer to invest in cryptocurrency through the platform, which was promoted by celebrities in adverts on social media and has a "blockchain building" in Taiwan.

She thought JPEX was operating with a license.

She did not try to withdraw any profits until the Securities and Futures Commission issued a warning statement on Wednesday, triggering users to flock to the platform and apply for withdrawing their funds.

"A lot of my friends said they did everything they could to invest, hoping to enjoy good returns in future," she said.

She added that JPEX has set a withdrawal maximum of 1,000 stablecoins but subject to a processing fee of up to 999 stablecoins.

Another victim, Lo, said he knew JPEX through advertisements in the MTR and on television and online through influencers.

He said he got to withdraw some funds and paid only three stablecoins for each transaction, but that was before the warning was issued.

Lo said some people invested up to eight-digit sums and hoped the government could provide assistance and find ways to solve the problem.

Ng urged the government to enhance the promotion of relevant legislation and policies to strike a balance between regulation and virtual asset development.

"I think the government needs to review the regulations and how to disclose more information in a more timely manner to let investors know what they are investing in, and which exchanges or entities are legal and regulated," Ng said.

Publicity and public education should also be strengthened to enable the public to have a better understanding of virtual asset trading and investment risks and make appropriate investment choices, he added.

Ng called on the media not to publish advertisements of unlicensed virtual asset exchanges to prevent the public from suffering financial and mental losses.

Incidents like this, he said, also affects Hong Kong's status as an international financial center and innovation and technology hub.

Ng said people should be aware of the investment risks of high-return products and affected customers should provide detailed information to police as soon as possible.

A mainland investor said he too lost more than HK$1 million.

The victim surnamed Yu said he invested in JPEX as he had confidence in Hong Kong's financial regulations, and did not believe that the city's regulatory bodies would allow the existence of unlicensed trading platforms.

He said he succeeded in withdrawing some profits but failed to withdraw his investment capital in July.

stacy.shi@singtaonewscorp.com