Hong Kong authorities detained eight individuals in connection with the cryptocurrency platform JPEX on charges of conspiracy to defraud.

The police disclosed that they had been inundated with 1,641 complaints regarding JPEX, with users alleging their inability to access their funds on the platform.

The total assets in question are estimated to be around HK$1.19 billion ($152 million), The Block reported.

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This incident underscores the importance of regulatory clarity and oversight in the rapidly evolving digital asset space. Such topics are expected to be at the forefront of discussions at Benzinga's Future of Digital Assets conference on Nov. 14, where industry experts will delve into the challenges and opportunities in the crypto realm.

During the operation, named "tieguan" or "iron gate," law enforcement officials conducted searches at 20 sites across the city, confiscating items valued at approximately HK$8 million, including cash, jewelry, and electronic devices. The police have also frozen assets amounting to HK$15 million linked to the arrested individuals and are contemplating the seizure of an additional HK$60 million believed to be ill-gotten gains.

One notable arrest was that of Joseph Lam, a prominent figure in the crypto community and a former attorney, due to his purported ties with JPEX.

The investigation into JPEX was initiated after the Securities and Futures Commission (SFC) cautioned about misleading claims made by crypto influencers and the platform itself, insinuating that JPEX had sought a virtual asset trading license in the region.

JPEX expressed its discontent with the authorities' actions, claiming it faced "unjust treatment." The exchange highlighted that while other platforms were welcomed into the Hong Kong market, JPEX faced continuous challenges, including the SFC urging its partners to sever ties.

The SFC emphasized that JPEX had been on their radar as an unlicensed entity since July 2022. Despite the introduction of a licensing system for crypto trading in June, JPEX neither applied for a license nor ceased its operations.

Despite public warnings about unregulated exchanges, JPEX's activities deteriorated, prompting the SFC to publicly denounce the platform.

The SFC reportedly notified Hong Kong Police's commercial crime division, and

Mak Wai-kwong, an official from the police's commercial crime unit, indicated that the investigation is ongoing.

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