Exclusive | Hong Kong JPEX scandal: police seek Interpol’s help to freeze ‘unusual’ outflow of cryptocurrency just after regulator sounded alarm
- Source says police have enlisted help of Interpol and virtual asset trading platforms as they track down funds amid fraud allegations targeting JPEX cryptocurrency company
- Two blockchain analytics firms report signs of ‘unusual outflow’ of tokens linked to JPEX after official warning last week
Hong Kong police are seeking the help of Interpol and overseas virtual asset trading platforms to intercept cryptocurrency linked to the city’s biggest-ever financial scam involving about HK$1.4 billion (US$179 million) siphoned off from investors, the Post has learned.
A source familiar with the case on Friday revealed the force had successfully frozen some of the cryptocurrency associated with the alleged fraud by the JPEX platform, and the task of tracing the funds was still under way amid a manhunt for those behind the company.
He said a team of local officers had been deployed to monitor blockchain activities and trace the transfers of digital coins connected to the platform.
“When they identify related transfers, they will reach out to police in the respective jurisdictions through Interpol, as well as our cooperative overseas exchange platforms, to freeze the digital coins,” the insider said.
Hong Kong police were working around the clock and racing against time to intercept the cryptocurrency before the digital coins could be moved out of “our network”, he said, adding some assets had already been frozen. But he stopped short of revealing the specific amount intercepted.
Police had received 2,265 complaints from victims as of 5pm on Friday. The claims involved about HK$1.4 billion in assets, making it the largest alleged fraud of its kind in the city.
Blockchain analytics firms Bitrace and 0xScope have both reported signs of “unusual outflow” of tokens from wallets associated with JPEX after the Securities and Futures Commission warned against the platform’s suspicious operations on September 13. JPEX has since been charging high processing fees on user withdrawals, ranging from 955 to 999 USDT, or Tether tokens, for every 1,000 USDT.
Tether is a cryptocurrency stablecoin, which is a type of digital currency that aims to maintain a steady valuation. One USDT is equal to about HK$7.82.