Hong Kong police have taken into custody crypto influencer Joseph Lam, known as ‘jolamchok’ on Instagram, in connection with his association with the troubled crypto exchange, JPEX. Lam’s arrest follows investigations into the liquidity crisis surrounding the exchange.
Association with JPEX
Joseph Lam’s arrest is linked to his alleged affiliation with JPEX, a cryptocurrency exchange currently facing scrutiny. It is reported that Lam’s office was raided by authorities, resulting in the confiscation of evidence, including a bag containing banknotes.
Lin Zuo shared a news article claiming that he was not impacted by JPEX investigations. Source: Instagram
The Securities and Futures Commission of Hong Kong recently issued a statement placing blame on JPEX for actively promoting its services and products to the Hong Kong public through online celebrities and over-the-counter money changers. Lam’s involvement as a social media influencer in promoting the platform appears to be at the center of the investigation.
Alleged Schemes and Victims
Unconfirmed reports suggest that Lam presented cryptocurrency investment “schemes” in a chat group, convincing at least one victim to invest $12,800 (100,000 Hong Kong dollars) in crypto. Lam allegedly claimed that people were pressuring him to repay money and that the amount involved was significantly higher than usual.
Lin Zuo visited Hong Kong police in relation to JPEX investigation. Source: Instagram
Joseph Lam has not provided an official response to the accusations at this time. However, he shared a news article stating that he was not directly implicated in the JPEX incident and expressed resilience. Lam has since met with the police, accompanied by his legal representatives, to provide necessary information.
JPEX’s Liquidity Crisis
JPEX has attributed its liquidity crisis to regulatory issues and the involvement of “third-party market makers.” The exchange has increased withdrawal fees and suspended certain operations as a result. They have committed to resolving the liquidity issues and returning withdrawal fees to normal levels once negotiations with third-party market makers conclude.
These developments coincide with the broader cryptocurrency market’s challenges. A recent report from Bitfinex revealed that capital outflows from the crypto industry reached $55 billion in August, impacting not only Bitcoin but also Ether and stablecoin liquidity. The situation highlights the growing importance of regulatory compliance and oversight in the cryptocurrency sector.