Hong Kong authorities are scrutinising JPEX, a cryptocurrency exchange, for allegations of fraud and have arrested staff members, as reported by the AFR
Previously promoting itself as an Australian-licensed business, the exchange has now been revealed to be registered to an apartment building in North Sydney.
Investors are irate, especially after assets worth up to HK$1.5 billion (US$300 million) were frozen.
Marketed as a licensed entity in Australia
According to the Securities and Futures Commission (SFC), JPEX misled investors by falsely stating that it had applied for trading licenses.
The company has been in operation since 2020 and marketed itself as a licensed entity in Australia, Canada, and the United States.
JP-EX Crypto Asset Platform, the entity behind JPEX, applied to deregister on the same day Hong Kong police arrested its staff.
Jeremiah Hartmann in the mix
Adding complexity to the unfolding investigation, Sydney-based voice presenter and actor Jeremiah Hartmann has also come under scrutiny.
Hartmann, who appeared in JPEX promotional videos, insists he was never an employee. Meanwhile, influencer Joseph Lam Chok is among those arrested in Hong Kong.
18 arrested
The allegations against JPEX have become the first test case for Hong Kong's newly introduced licensing regime for retail trading by licensed exchanges.
Hong Kong police have so far arrested 18 individuals in connection with JPEX and are working with Interpol to locate company executives.
The company claimed its attempts to consult with the SFC have been dismissed or sidestepped.