Two individuals have initiated a civil lawsuit against cryptocurrency trading firm JPEX and other defendants, alleging a fraud amounting to 1.6 billion Hong Kong dollars ($208 million). This marks the inaugural civil suit in the matter, with more anticipated in the future.
Herbert Lam Sung-him and Chan Wing-yan have each presented a claim of $236,500 in the Hong Kong district court, as reported by the South China Morning Post. On June 4, they submitted three alternative claims, leaving the decision to the court.
In addition to JPEX, the lawsuit implicates an associated entity – Web3.0 Technical Support, “any persons involved in or aiding the scheme,” three individuals identified as “wallet holder[s],” and Felix Chiu King-yin, the general manager of JPEX-linked cryptocurrency exchange Coingaroo.
The lawsuit is the sole recourse available against JPEX. It centers on three transfers Chan made into JPEX wallets in July and August, totaling $110,500 in Tether (USDT) and $130,000 in cash at the prevailing exchange rate. One of the transfers was conducted under Lam’s name. However, the plaintiffs were unable to withdraw these funds as they discovered that the money had been swiftly moved out of their wallets “within five minutes” of deposit.
Legal representative Joshua Chu Kiu-wah, acting on behalf of Chan and Lam, stated that a civil lawsuit is the only means for victims to reclaim their lost funds.
The investigation into Dubai-headquartered JPEX commenced in September after the Hong Kong Security and Futures Commission identified it as an unlicensed virtual asset trading platform. Eleven individuals were detained in that month. As per the Hong Kong Free Press, the number of arrestees had escalated to 73 by June 3, all of whom have been granted bail.
Social media influencer Joseph Lam Chok, also known as Lin Zuo, was among the arrested individuals, as noted in the lawsuit filed by the plaintiffs.
By April, the police had received 2,265 complaints against JPEX. Legislator Johnny Ng Kit-chong disclosed that he had been in touch with numerous victims of the alleged fraud and was aware of 10 potential civil suits under consideration.