Hong Kong regulators are aiming to tighten the noose around the crypto business following the arrest of six people in connection with suspicions of fraud involving an unregistered cryptocurrency exchange named JPEX.

According to the Associated Press, Hong Kong Chief Executive John Lee Ka-Chiu told reporters on September 19 that the government would boost its efforts to alert investors and urge them to only use platforms licensed by the Securities and Futures Commission.

On September 13, the SFC informed the public that it had received over 1,000 complaints about the unregistered crypto exchange platform, with claims of losses totaling more than 1 billion Hong Kong dollars ($128 million).

The SFC highlighted in its warning that JPEX promoted the platform's services and products to Hong Kong residents via internet celebrities and over-the-counter money changers.

As JPEX's troubles became apparent, several platform customers were unable to withdraw their payments, while others complained about decreased wallet amounts. Following the Hong Kong watchdog's warning, the exchange reportedly hiked its withdrawal cost to $1,000 in order to prevent consumers from withdrawing their money.

The crypto exchange later blamed third-party market makers for the platform's ongoing liquidity crisis, which culminated in the withdrawal fee increase. Influencer Joseph Lam (Lin Zuo) was also arrested by Hong Kong police for his involvement with JPEX.

Sources:

https://cointelegraph.com/news/crypto-rules-hong-kong-tightened-after-jpex-fraud-case

https://apnews.com/article/jpex-cryptocurrency-fraud-hong-kong-china-d6098fe38a20f918f3a44dac1da5612e