Two individuals have taken legal action against the cryptocurrency trading firm JPEX and other parties by filing a civil lawsuit. The lawsuit alleges that JPEX was involved in a fraudulent scheme amounting to 1.6 billion Hong Kong dollars ($208 million). This initial civil suit is expected to be followed by additional legal actions.
Herbert Lam Sung-him and Chan Wing-yan have each submitted claims amounting to $236,500 in the Hong Kong district court, as reported by the South China Morning Post. On June 4, the duo presented three alternative claims for the court to consider.
Apart from JPEX, the lawsuit lists an affiliated entity — Web3.0 Technical Support, individuals involved in the scheme, three individuals referred to as “wallet holders,” and Felix Chiu King-yin, the general manager of Coingaroo, a cryptocurrency exchange associated with JPEX.
The lawsuit centers around three transfers that Chan made into JPEX wallets in July and August, totaling $110,500 in Tether (USDT) and $130,000 in cash based on the current exchange rate. One of the transfers was made in Lam’s name. However, the plaintiffs discovered that the funds had been swiftly withdrawn from their wallets shortly after depositing them.
According to Joshua Chu Kiu-wah, the legal representative of Chan and Lam, a civil suit is the only recourse for recovering funds lost in the alleged fraud involving JPEX.
The investigation into JPEX, based in Dubai, commenced in September after the Hong Kong Security and Futures Commission flagged it as an unlicensed virtual asset trading platform. Eleven individuals were apprehended in that month. By June 3, the number of arrestees had climbed to 73, all of whom have been released on bail, as reported by the Hong Kong Free Press.
Social media influencer Joseph Lam Chok, also known as Lin Zuo, was among those detained. He was specifically named in the lawsuit by the plaintiffs. The police had received a total of 2,265 complaints against JPEX by April. Legislator Johnny Ng Kit-chong disclosed that he was in touch with numerous victims of the alleged fraud and was aware of ten more potential civil suits being considered.