The controversy surrounding the collapsed cryptocurrency exchange JPEX, has taken a new turn as Taiwanese prosecutors identify fresh suspects in the ongoing investigation. The Taipei District Prosecutors Office (TDPO) has reportedly requested the detention of Chang Tung-ying, the Chief Partner at JPEX's Taiwan office, over allegations of fraud, according to local TV channel TVBS News.
JPEX Investigation: Searches Conducted at Nine Locations
Authorities executed searches at nine locations linked to the JPEX investigation, summoning Chang and three other individuals, including JPEX lecturer Shih Yu-sheng, on charges of violating the Banking Act and the Money Laundering Control Act. JPEX salespersons Liu Chien-fu and Niu Keng-sheng were released: Liu was granted bail of 50,000 new Taiwan dollars ($1,550); Niu, registered as a person in charge of JPEX Taiwan, was released after questioning.
The report additionally highlighted the involvement of Nine Chen, a Taiwanese celebrity, who was summoned by prosecutors. Initially called to testify as a witness, prosecutors subsequently named Nine Chen as a defendant in the case. In a tweet from JPEX's official X account back in 2022, Nine Chen was announced as their brand ambassador.
???? JPEX Announces Well-known Taiwanese Artist Nine Chen（Instagram：diegodtk09）as JPEX Brand Ambassador???????? https://t.co/2oOXOB8ijt pic.twitter.com/5uxy1rkpnp
— JPEX_Official (@ExchangeJpex) November 14, 2022
JPEX faced a sudden halt in some services in mid-September 2023, citing a liquidity crisis allegedly triggered by "unfair treatment" from institutions in Hong Kong. The abrupt collapse led to accusations of misleading investors about having applied for a crypto trading license.
Hong Kong authorities launched an investigation following over 2,000 complaints from JPEX users, reporting losses nearing $180 million. The scandal has raised concerns among financial regulators in Hong Kong, Taiwan, and other jurisdictions.
As of September 25, law enforcement has detained at least 11 suspects in the JPEX case, while the alleged masterminds remain elusive, heightening the complexity of the investigation. The JPEXsaga has continued to ring across the cryptocurrency industry, serving as a cautionary tale for investors and regulators alike.
Gaps in Hong Kong's Regulatory Framework
Hong Kong's Securities and Futures Commission (SFC) has introduced new measuresaimed at protection for retail investors following the JPEX crypto exchange debacle, Finance Magnatesreported. The initiatives, announced in response to vulnerabilities exposed in the city's regulatory framework for virtual assets, focus on transparency, raising public awareness, and tightening regulations surrounding crypto trading platforms.
The SFC plans to publish a list of licensed Virtual Asset Trading Platforms on its website, covering existing platforms, those in the application process, and entities facing closure or suspicion. The SFC is launching a public campaign to educate individuals on safeguarding against fraud, signaling a commitment to investigating and prosecuting illegal platforms while intensifying intelligence efforts related to virtual assets.
This article was written by Tareq Sikder at www.financemagnates.com.
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