Civil Action Launched Against JPEX to Recover HK$1.8M in Hong Kong

Plaintiffs have lodged claims with a Hong Kong court to recover HK$1.85 million ($240,000) in the JPEX crypto scandal.

Herbert Lee Sung-him and Chan Wing-yan marked the first civil action against the platform, which was investigated following allegations of financial fraud and losses amounting to $1.6 billion.

The pair are represented by technology legal specialist Joshua Chu Kiu-wah. Ten others are also considering taking action.

At least 2,363 victims were swindled by the Hong Kong exchange, which promoted itself through widespread advertising and influencers as a licensed crypto exchange with yields of 20%.

In September 2023, JPEX suddenly suspended its services and announced that it was under investigation by the Hong Kong police for suspected money laundering and fraud. The platform’s website and social media accounts were taken down, and its customer service hotline was disconnected.

Police Commissioner Raymond Siu Chak-yee said in April that Hong Kong police have frozen HK$228 million (US$29.37 million) in assets so far amid arrests.

The plaintiffs are looking to hold accountable “any persons who carried out or assisted in the scheme,” including three wallet address holders linked to the platform.

Coingaroo's general manager, Felix Chiu King-yin, is also named as a defendant as the Hong Kong crypto exchange had operational ties to JPEX.

Chan alleges that she paid Chiu HK$1,850,000. Chiu converted part of these funds into 195,499 USDT and deposited it into a JPEX wallet. Additional deposits totaling 247,498 USDT were deposited into two JPEX wallets by Chan but the assets were transferred "within five minutes after each of the deposits was made. "These assets were allegedly moved to dozens of unknown wallets.

The plaintiffs are also looking to recover another 226,012 USDT converted without authorization.

Lawmaker Johnny Ng Kit-chong is in contact with a few hundred victims and said 10 of them planned to launch a civil claim against the platform but they need time to consider the cost of litigation.

Chu said the court’s findings could potentially affect the forthcoming criminal proceedings. “Notably, the findings from the civil proceedings may potentially bolster the parallel criminal investigation against the suspects, underscoring the importance of this multifaceted legal strategy for the victims,” he said.