Seven more people linked to the cryptocurrency brokerage scandal JPEX were arrested this Thursday (5), bringing the number of detainees to 27. In total, the scam is estimated to be worth around 1.55 billion Hong Kong dollars, approximately R$1 billion in direct conversion.
Sources from the South China Morning Post newspaper indicate that one of those arrested was the CEO of CryptoPARD, another Hong Kong brokerage active in the over-the-counter (OTC) market.
Three other people arrested were believed to be involved with Coingaroo and Tung Club brokers, also in the region, while a sixth suspect had a direct connection to JPEX.
Finally, one last man, without much information other than his last name (Mok), also had a Lamborghini seized by authorities during his arrest, The Standard reports.
The JPEX scandal
Although Hong Kong opened its doors to cryptocurrencies earlier this year, local regulators noted that exchanges would need licenses to operate in the region, which was not the case with JPEX.
According to a complaint from the relevant authorities in Hong Kong, despite stating on its website that it was licensed to operate in the country, JPEX did not even submit such a request.
What seemed like a small problem quickly turned into something big. In the following days, users of the broker started reporting this, stating that JPEX started charging exorbitant fees for withdrawing their cryptocurrencies.
For example, a user requested a $1,000 withdrawal but ended up paying $999 in fees. Therefore, the dirty strategy was a big indication that JPEX would be insolvent, i.e., unable to honor withdrawal requests.
In the following days, Hong Kong authorities began making several arrests in the region. The list includes both executives and influencers who promoted products that promised returns of 30% per year.
One of the suspects attempted to destroy evidence in a bathtub full of water, the arrest that attracted the most attention so far. In addition to luxury cars, the police also managed to confiscate a large amount of money.
The arrests continued this Thursday (27), when another seven suspects were detained by authorities. The case appears to serve as an example for other scammers tarnishing the reputation of the cryptocurrency industry, which is slowly trying to reclaim Hong Kong.
Finally, the recommendation for investors is to doubt returns promises and not to use brokers as a portfolio. After all, although the authorities are resolving these cases more quickly, it is difficult to believe that all injured parties will be able to get their money back.
Source: Live Coins

Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.