Law enforcement agents in Taiwan have confirmed the arrest of more suspects linked to the embattled digital currency exchange JPEX over allegations of fraud and misrepresentation.
Local publication Central News Agency (CNA) reported that the Taiwan Taipei District Prosecutors Office has arrested Chang Tung-Ying, a high-ranking partner in JPEX’s Taiwan Office, and Shi Yu, an academic with known ties with the exchange. Both individuals were arrested following complaints by Taiwan residents bordering on violations of anti-money laundering regulations.
Per the report, Taiwanese authorities recorded two more arrests following a joint raid on nine locations linked to JPEX. Out of the lot, local police released one suspect on bail for NT$50,000 (US$1,500) after meeting prerequisite bail conditions.
The Taiwan Taipei District Prosecutors Office is currently piecing together a case against the arrested suspects, summoning more individuals, including singer-songwriter Chen Lingjiu. JPEX allegedly roped in Chen to promote the exchange to Taiwan’s residents, with prosecutors considering whether or not to include the superstar as a co-defendant.
However, Chen continues to protest his innocence, claiming to have recorded losses of the entire endorsement fees earned from JPEX due to his investment in the platform.
“Even if I received endorsement fees, my investment in this platform has exceeded the endorsement fees,” said Chen.
While the extent of JPEX’s activities in Taiwan is still shrouded, more than 10 residents have formally filed complaints, with losses reportedly running into thousands of dollars.
Things began unraveling at the seams for JPEX after Hong Kong’s Securities and Futures Commission (SFC) issued a public advisory warning residents against investing in the unregistered digital asset exchange. Following the release, scores of investors scrambled to withdraw their holdings from the platform, forcing JPEX to impose withdrawal limits over liquidity challenges.
Following complaints to law enforcement over fraud, Hong Kong and Macau authorities moved in to arrest suspects, with the total amount of arrests surpassing two dozen individuals.
Blaming the SFC
Hong Kong’s SFC has received criticisms over the JPEX debacle for seemingly turning a blind eye against the operation of the “illegal exchange” despite its claims of weeding out bad actors.
JPEX shifted the blame on the SFC for its liquidity crisis following its “ill-advised” public advisory. The embattled exchange revealed ongoing plans to seek proper SFC registration, citing a February public statement.
“The unfair suppression by the SFC has led us to consider withdrawing our license application in the Hong Kong region and adjust our future policy development accordingly,” said JPEX.
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