Crypto exchange JPEX suspends trades amid investigation into suspected fraud

JPEX-Crypto Platform, a cryptocurrency exchange in Hong Kong, is reportedly suspending trades amid a police and financial regulator's investigation into suspected fraud.

The exchange, as per South China Morning Post (SCMP) announced on Sunday that negative news had led market makers to freeze its capital and disrupt its cash flow.

Complaints against JPEX

The police have received 83 complaints related to JPEX. These complaints involve virtual assets worth about HK$34 million (US$4.3 million). As per Coin Market Cap, the platform has also faced controversy over its increased withdrawal fees and unaccounted staff at its Singapore 2049 booth.

Investigation by the Commercial Crime Bureau was reportedly triggered after China's Securities and Futures Commission alerted the police about suspected fraud.

Investors warned

The Securities and Futures Commission previously on Wednesday warned potential investors to be cautious when dealing with JPEX.

JPEX, which has been advertising itself as a "licensed and recognised platform" is reportedly yet to file any license applications and has allegedly also made false claims about obtaining permits from overseas regulators.

The financial watchdog also cautioned against the platform's advertisements promising returns on savings products that seemed "too good to be true" and its reliance on misleading statements from social media influencers who were paid promoters.

As a result of the warning, some users encountered difficulties withdrawing virtual assets from their online accounts.

In its Sunday statement, JPEX did not name any organisations but claimed it was being treated unfairly.

The exchange said it would freeze new trades, while existing ones would remain effective until maturity. JPEX also promised "to recover liquidity from market makers as soon as possible and gradually adjust the withdrawal fees back to normal levels".

Previously, JPEX had criticised the allegations levelled against it and called them "unfair suppression". It also said that the regulator was "exerting undue pressure" on it.

(With inputs from agencies)

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