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Hong Kong JPEX Cryptocurrency Scandal: Couple Files First Civil Lawsuits in Attempt to Recover HK$5.5 Million
Listing JPEX Crypto Asset Platform as the first defendant and Web 3.0 Technical Support – an affiliated company – as the second, the pair also sued “all persons who executed or assisted in the scheme”.
Three others are also named as defendants in the legal document, appearing as “wallet address holders” for three respective accounts on the JPEX platform.
Felix Chiu King-yin, general manager of Coingaroo, a Hong Kong cryptocurrency exchange linked to JPEX, is named as a defendant.
Joseph Lam (centre) was arrested last September but released soon after. Photo: flyer
Chan claims that Chiu received HK$1,850,000 (US$237,179) from her and that the money was partially converted into 195,499 USDT, a cryptocurrency also known as Tether, in a JPEX wallet.
The plaintiffs alleged that Chan separately made several deposits worth 247,498 USDT into two JPEX wallets between July and August last year.
They found that the assets had been moved “within five minutes of each of the deposits being made” and subsequently transferred to “several other wallets of unknown holders” before examining their accounts on September 14 last year.
On top of that, they are also seeking another 226,012 USDT, which are said to be cryptocurrencies that appeared in the plaintiffs’ JPEX accounts before being converted into other cryptocurrencies without permission.
The plaintiffs are asking the court to issue an order to trace the lost funds and to grant an injunction to move the cryptocurrency to other platforms.
Police launched an investigation into JPEX last September after the Security and Futures Commission identified it as an unlicensed virtual asset trading platform.
As of April, police had received 2,265 reports from alleged victims and the number of people arrested on charges of conspiracy to commit fraud stood at 11.
Lam, among other social media influencers who helped promote JPEX, was arrested by the police force’s commercial crime bureau last September but released soon after.
Technology law specialist Joshua Chu Kiu-wah, who is handling the couple’s claims, said the court’s findings and observations in the civil case could potentially influence the upcoming criminal proceedings.
“In particular, the results of the civil proceedings could potentially strengthen the parallel criminal investigation against the suspects, underlining the importance of this multifaceted legal strategy for victims,” he said.
He encouraged people to consider initiating civil proceedings to recover lost assets while awaiting the results of law enforcement investigations, as police are “unable to return seized funds without a court order from the civil case”.