Investors Launch First Civil Suit Against JPEX, Anticipate More

Two individuals have initiated a civil lawsuit against the cryptocurrency trading firm JPEX and several other parties. The lawsuit accuses JPEX of engaging in fraudulent activities involving a substantial amount of 1.6 billion Hong Kong dollars, approximately $208 million. This lawsuit represents the inaugural civil action in the unfolding case, with expectations that additional lawsuits will ensue.

Herbert Lam Sung-him and Chan Wing-yan, the plaintiffs, are each seeking compensation of $236,500 in the Hong Kong district court. They have presented three alternative claims in their filing on June 4, allowing the court to choose among the options. Besides JPEX, the lawsuit lists Web3.0 Technical Support, an affiliated company, and several individuals involved in the scheme, including three “wallet holders” and Felix Chiu King-yin, the general manager of the JPEX-related cryptocurrency exchange Coingaroo.

The lawsuit focuses on three transfers made by Chan into JPEX wallets during July and August, amounting to $110,500 in Tether and $130,000 in cash at current exchange rates. One of these transfers was conducted in Lam’s name. Upon attempting to withdraw the funds, the plaintiffs discovered that their funds had been moved from their wallets within a mere five minutes after being deposited.

Chan and Lam’s legal representative, Joshua Chu Kiu-wah, emphasized that a civil lawsuit is the only feasible means for victims of the alleged fraud to attempt to recover their funds. Chu further noted that the findings from the civil proceedings might support the ongoing criminal investigation against the suspects, highlighting the strategic importance of this dual legal approach for the victims.

The probe into the Dubai-based JPEX commenced in September following the identification of the platform as an unlicensed virtual asset trading entity by the Hong Kong Security and Futures Commission. Since then, the investigation has led to the arrest of eleven individuals in September. By June 3, this number had escalated to 73, all of whom have been released on bail.

Among those arrested was social media influencer Joseph Lam Chok, also known as Lin Zuo. He has been specifically named by the plaintiffs in their lawsuit. As of April, Hong Kong police had received a staggering 2,265 complaints against JPEX, indicating the widespread impact of the alleged fraudulent activities.

Legislator Johnny Ng Kit-chong reported that he has been in communication with hundreds of victims of the alleged scheme. He also mentioned that there are at least ten additional civil lawsuits being contemplated against JPEX, signaling the potential for an extensive legal battle ahead for the accused parties.

As the investigation and legal proceedings continue, they are expected to play a crucial role in determining the full scope of the alleged fraud and the involvement of the various parties implicated. The unfolding situation underscores the challenges and complexities in regulating and securing the cryptocurrency trading landscape.

The outcome of these civil actions could significantly influence the parallel criminal investigations, providing critical evidence and bolstering the case against those suspected of involvement in the fraudulent operations associated with JPEX. The legal community and victims alike await further developments with keen interest and hope for a resolution that offers restitution for the affected individuals.