Kenne Michael 
Joseph Lam’s recent arrest and the closure of JPEX, an unlicensed Hong Kong cryptocurrency exchange, have sent ripples to the cryptocurrency community.
Lam, a social media influencer with a substantial following, was one of 11 people arrested in connection with an alleged HK$1.5 billion ($192 million) fraud scheme involving JPEX.
Four months after the introduction of new cryptocurrency regulations, Hong Kong’s swift response demonstrates the government’s commitment to clamping down on illegal activities in the crypto space.
The Securities and Futures Commission (SFC) had warned investors about JPEX’s lack of a license, causing local telecom carriers to block its website and mobile application.
However, this incident illustrates governments’ difficulties when attempting to regulate an industry notorious for fraud and volatility.
Some argue that retail trading in cryptocurrencies is hazardous, particularly without adequate investor education.
The JPEX case is a prime example of how exaggerated returns can be used to entice small investors.
Despite warnings and being placed on a watch list, thousands of Hong Kong residents continued to invest in the platform due to its attractive returns.