JPEX Controversy｜Six people including Lin Zuo and Chen Yi were arrested on suspicion of conspiracy to commit fraud. Four people reported the case and involved 1 billion yuan. The company issued another statement criticizing the Securities Regulatory Commission.
[Yahoo News Report]After the cryptocurrency exchange JPEX was criticized by the Securities Regulatory Commission for operating improper practices last Wednesday (13th), the Police Commercial Crime Investigation Bureau took action on Monday (18th) and arrested 4 men and 2 women in each district. Suspected of “conspiracy to defraud”, those arrested include Lin Zuo and Internet celebrity Chen Yi. The police seized cash from the two cryptocurrency exchange shops located in Entertainment District in Central and Wing On Plaza in Tsim Sha Tsui. As for other companies that cooperated with JPEX for promotion, including Coiner and Tung Club, they were also raided by the police. Among them, the Coingaroo branch was busted by the police. The police said that as of 2 pm on Monday, 1,408 people had reported the crime, involving about 1 billion yuan. JPEX said it was “extremely disappointed” that the Securities and Futures Commission had “unfairly disrupted market order” and stressed that it would continue to operate.
JPEX, established in 2019, provides extremely high returns on the company’s financial products, including cryptocurrency demand deposits with an annual interest rate of 20%. However, the China Securities Regulatory Commission pointed out that some media received complaints from customers stating that their accounts were unable to withdraw funds or had balances Has been tampered with. In addition, JPEX has advertised its application for a local license, but the Securities and Futures Commission has still not received it. In addition, JPEX has also been promoting its partnership system, and partners can receive compensation for referring retail investors to the market.
[UpdatedreportSeptember19th06:05]
JPEX issued an announcement on the afternoon of Monday (18th), claiming that in order to “protect the rights and interests of users”, on September 15, two days after being named and criticized, it requested guidance from the China Securities Regulatory Commission, but the other party responded that the China Securities Regulatory Commission had referred the case to police and will assist them in their investigations.
JPEX said it was “extremely disappointed” that the China Securities Regulatory Commission used “unfair methods to undermine market order” and believed that they had a biased attitude and failed to play a fair and just regulatory role. “The (JPEX) platform will be the best example to prove to the international community.” Is the Securities and Futures Commission helping Hong Kong to firmly embark on the road to WEB 3.0 construction?” and stated that JPEX “will continue to operate unswervingly.”
[Updatedreportat19:05]
The police responded to “Yahoo News” and stated that they received a referral from the Securities and Futures Commission on September 14 and handed it over to the Commercial Crime Investigation Bureau for follow-up. Today (18th), 4 men and 2 women were arrested in each district on suspicion of “conspiracy to defraud.” ”, 6 people are currently being detained for investigation. Relevant operations are still ongoing and more arrests cannot be ruled out.
The police said that as of 2 pm today, the police had received reports from 1,408 people regarding related incidents, involving approximately NT$1 billion.
[Updated report at 17:45]
Police operations against JPEX and related persons continue. Coined to promote JPEX’s cryptocurrency exchange shop “Coingaroo”, which has many branches, including Tuen Mun Town Plaza, Lockhart Road, Causeway Bay,Branch on Shantung Street, Mongkok, was searched by the police this afternoon. Since the store was closed today and there were no staff to respond, the police had to use tools to break in.
Coingaroo posted a “limited time update” (Story) on Instagram yesterday, stating that “the store will be closed for one day tomorrow (18th)” and online services will remain normal.
After receiving a referral from the Securities and Futures Commission, the police launched a large-scale arrest and search operation against JPEX. At about 4 pm today (18th), the Causeway Bay store of the cryptocurrency exchange shop “Coingaroo” closed half of the gate and raised the police seal. (Picture: eyepress)
After receiving a referral from the Securities and Futures Commission, the police launched a large-scale arrest and search operation against JPEX. At about 4 pm today (18th), the Causeway Bay store of the cryptocurrency exchange shop “Coingaroo” closed half of the gate and raised the police seal. (Picture: eyepress)
After receiving a referral from the Securities and Futures Commission, the police launched a large-scale arrest and search operation against JPEX. At about 4 pm today (18th), the Causeway Bay store of the cryptocurrency exchange shop “Coingaroo” closed half of the gate and raised the police seal. (Picture: eyepress)
Coingaroo’s branch in Tuen Mun Town Plaza was surrounded by mall staff. (Picture: True Tuen Mun Friends FB)
A police officer entered the Coingaroo Tuen Mun Plaza branch to inquire. (Picture: True Tuen Mun Friends FB)
Coingaroo’s branch on Shantung Street in Mongkok was also raided. (Photo: Pace Cheng)
Coingaroo posted an IG Story yesterday, stating that the store will be closed today (18th).
[Updated report at 15:10]
“Yahoo News” received news that another Internet celebrity “Chen Yi” (formerly known as Chen Kaiyi) who was involved in promoting JPEX was arrested on suspicion of conspiracy to commit fraud. The source also pointed out that the police have received reports from more than a thousand people so far regarding the JPEX incident. Legislative Council member Wu Jiezhuang also held a press conference this morning, saying that 30 people had requested help and the total loss was estimated to be more than NT$100 million.
Chen Yi also operates cryptocurrency exchange shops on the 12th floor of Wing On Plaza in Tsim Sha Tsui and Fuk Fuk Street in Yuen Long. Some netizens uploaded photos, saying that there were security guards guarding the entrance and exit of Chen Yi’s office in Wing On Plaza, and there were also screens blocking the entrance to the office.
Chen Yi’s YouTube channel currently has 220,000 subscribers. After JPEX was criticized by the China Securities Regulatory Commission last week, Chen Yi uploaded a video on YouTube, calling the China Securities Regulatory Commission a “corruption agency” and calling him a “bad character”.The accusations against JPEX are “blindly relying on humiliation”。
According to news, KOL Chen Yi was also arrested by the police on suspicion of conspiracy to commit fraud. The picture shows the office in Wing On Plaza, Tsim Sha Tsui, with security guards guarding the entrance and exit. (Photo: LIHKG)
After Chen Yi criticized JPEX by name, she criticized the China Securities Regulatory Commission for “blindly relying on subjugation.” (Picture: Chen Yi YouTube)
[Original report]
There are new developments in the cryptocurrency exchange JPEX crisis: The police arrested Lin Zuo today (18th) on suspicion of conspiracy to commit fraud, and suspected that he was related to the incident. The police also searched Lam Zuo’s office in the Entertainment Building in Central. The case is now being handed over to the Commercial Crime Bureau for follow-up. At around 12:30, Lin Zuo left the entertainment center under the arrangement of the police. Sources on the scene indicated that he would be taken to the police station for questioning. Officers from the Commercial Crime Bureau also removed a large number of exhibits, including stacks of cash.
At around 12:30, Lin Zuo left the entertainment mall under the arrangement of police officers from the Commercial Crime Investigation Bureau. (Screenshot of Channel C live broadcast)
Lin Zuo (the one wearing amber glasses) was taken away by the police.
Officers from the Commercial Crime Investigation Bureau took away the evidence.
Commercial Crime Bureau officers removed the evidence, including stacks of cash. (Screenshot of Channel C live broadcast)
Lin Zuo’s cryptocurrency exchange shop is located in the Entertainment District in Central, with a monthly rent of NT$260,000. It officially opened this month.
Claiming to be affected by the incident and suffering heavy losses
After JPEX was named by the China Securities Regulatory Commission, new withdrawal restrictions were added. Investors were limited to withdrawing 1,000 Tether (USDT, 1 USDT is worth approximately 1 US dollar), and the handling fee was once as high as 999 USDT. After JPEX launched the measures, many investors were worried about losing all their money. Lin Zuo once said that he had “suffered heavy losses” and said he would help follow up on the incident.
Lin Zuo said last Friday that he took the initiative to contact the police through his lawyer, saying that he wanted to provide “urgent and useful” information in the hope of “seeking justice” for the affected people. The police opened an electronic link for online reporting that night, and Lin Zuo also posted a post, but he stated that he “did not actively seek credit.” Yesterday (17th), Lin Zuo stated on Instagram that he had contacted two “familiar legislators” on Saturday (16th) night, and said that both of them attached great importance to the development of cryptocurrency.
Police Commissioner Xiao Zeyi said last Saturday that 83 people called the police for help regarding the JPEX incident, involving NT$34 million.
After JPEX raised the withdrawal threshold, many investors were worried about losing all their money. Lin Zuo once said that he had “suffered heavy losses” and said he would help follow up the incident. Lin Zuocai said yesterday (17th) that he had contacted two “familiar legislators” on the evening of Saturday (16th) and said that both of them attached great importance to the development of cryptocurrency.
After being fired by the insurance company in June, he changed careers.
Lin Zuo, who was originally an insurance broker, was fired from Prudential because of his “draining” remarks after the “Diamond Hill Massacre” in June. Lin Zuo later said that the prospect of cryptocurrency is good, and he decided to devote all his efforts to the cryptocurrency business, teach classes, and open a cryptocurrency exchange shop in the Entertainment District in Central. On August 1, Lin Zuo stated on his Facebook page that he had become a “partner” of JPEX. However, after JPEX’s “accident”, he quickly cut off his position, saying, “Currently, I can’t see such a post on my Facebook.” He also pointed out that the page is often managed by colleagues, and he has no memory of announcing that he has become a partner of JPEX on the page.
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Lin Zuo once showed a screenshot of his account on JPEX on a social platform, which showed that he had assets equivalent to 28 Bitcoins on the exchange at the time, with a market value of approximately HK$6.8 million at the time. Lin Zuo even stated at the time that he was determined to become the “godfather of the currency circle.”
On the 5th of this month, Lin Zuo showed a screenshot on IG, saying that he received a check of 740,000 yuan from “Stock Class Teaching”. He said at the time, “This is one of my incomes last month,” and “it’s N times what I got from insurance before.”
Being a “partner” can earn commissions
JPEX launches in 2022partnership system, indicating inviting customers to become “partners”. The terms at the time mentioned that if 1,000 people could be invited to join as JPEX customers, and the average assets invited within 30 days reached 10 million USDT, the partners would receive a monthly reward of 6,000 USDT, equivalent to HK$47,000.As for April this yearJPEX further upgraded the system, saying that “reverse (rebate) commission rewards can be up to 100,000 USDT”, which is equivalent to HK$780,000.
Lin Zuo shared his income of 740,000 yuan. (Picture: Lin Zuo IG)
Lin Zuoceng showed his assets on JPEX in July. At that time, he had assets equivalent to 28 Bitcoins, with a market value of about HK$6.8 million at the time.
Lin Zuo once stated in July that he wanted to become the “godfather of the currency circle.”
JPEX was singled out by the Securities and Futures Commission last week for customer complaints that their balances had been tampered with
JPEX, established in 2019, has not been licensed by the Securities and Futures Commission as a regulated virtual asset trading platform. The China Securities Regulatory Commission stipulates that platforms that have not applied for a license can apply for a license within a nine-month grace period and have a one-year “non-violation period” to continue operating business. JPEX has expressed its desire to apply for a license, but has not yet submitted the application due to the time required to prepare documents. JPEX has stated on its official website and entities in the past that they are “a licensed and recognized digital asset and virtual currency platform.”
The China Securities Regulatory Commission issued a press release in Augustanonymously warned that there were virtual asset trading platforms with “improper business practices” on the market; until last week, JPEX became the first platform to be named and criticized by the Securities Regulatory Commission.The China Securities Regulatory Commission said in a statement last Wednesday (13th), JPEX has many suspicious aspects, including providing extremely high returns on some of its products, such as the annual rate of return on Bitcoin “current financial management” deposits as high as 20%; some retail investors also reported to the media that they were unable to obtain Withdraw virtual assets from accounts opened at JPEX, or find that their account balances have been reduced and changed. In addition, some internet celebrities and exchange shops claim that JPEX has applied for a local license.
According to information from the Securities and Futures Commission, there are currently only two licensed platforms in Hong Kong, namely OSL Exchange and HashKey Exchange. As of press time, HashKey’s trading pair with the highest trading volume is USDT/USD, with a 24-hour turnover of US$236,000. As for Bitcoin-related transactions, the 24-hour turnover is less than US$90,000.
Public relations activities are empty.
After the China Securities Regulatory Commission issued a press release last week,JPEX CriticismThe SFC’s approach conflicts with the SAR government’s decision to build Hong Kong into a “Web 3.0 city”. It characterized its actions as “unfair suppression” and believed it should be responsible for “undermining the prospects of developing cryptocurrency in Hong Kong.” Take full responsibility.” Last Thursday, JPEX issued another announcement stating that it would make “business and policy adjustments” and therefore adjust the USDT withdrawal fee, which is the above-mentioned “withdraw one thousand yuan to get one yuan” event.
In addition, the date when the Securities Regulatory Commission published the article coincided with the “Token2049” cryptocurrency summit held in Singapore on the 13th and 14th of this month.Those who are interested in cryptocurrencyTaiwan mediaAccording to reports, JPEX was originally one of the major sponsors of the summit and had a large booth at the venue. However, the day after the CSRC published the article, the booth was empty and all staff were evacuated.
JPEX also announced last night (17th) that all transactions on the financial management page will be delisted from today (18th). Users will not be able to place any new financial management orders. Old ongoing financial management orders will be maintained until the end of the product to collect profits. .
2023-09-18 22:59:34
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