Hong Kong unlicensed cryptocurrency exchange JPEX, which collapsed in September last year, has been involved in a case with a total amount exceeding HKD 1.61 billion. Recently, two victims have filed the first civil lawsuit against JPEX and related individuals, seeking compensation of up to 240,000 Thai Baht (approximately HKD 1.85 million or TWD 7.66 million).
Summary of the situation:
JPEX Case: 6 more people arrested! Hong Kong police statistics show that there have been 2,528 reported victims and the amount involved has exceeded TWD 6.3 billion.
Background information:
Chen Ling Jiu emerged from the shadow of JPEX! Rumors of a romantic relationship with “Constitutional Brother’s Daughter”, causing public outrage: while we fight for justice, you’re living comfortably.
Contents of the article:
Description of the incident
Lawsuit requests
Statement from the representative lawyer: A successful lawsuit will help recover losses
Since the collapse of Hong Kong’s unlicensed cryptocurrency exchange JPEX in September last year, the police have stated that the amount involved in the case in Hong Kong has exceeded HKD 1.61 billion (approximately TWD 6.3 billion). The number of fraud reports has exceeded 2,623. The case is currently under criminal investigation.
Today, the Hong Kong media Ming Pao reported that two victims have recently instructed lawyers to file a lawsuit in the District Court, seeking compensation of 240,000 Thai Baht or HKD 1.85 million from the JPEX group and related individuals, totaling 7 defendants. This is the first civil claim case against JPEX. J.Q. Law Firm, which represents the plaintiffs, stated that a successful lawsuit and compensation can set an example and help more victims recover their losses.
According to the lawsuit, the two plaintiffs are Chen Ying’en and Li Shunqian. From July to August last year, Chen Ying’en attended a cryptocurrency seminar hosted by internet celebrity Lin Zuo and mistakenly believed that JPEX was a licensed, legitimate, and trustworthy virtual asset trading platform. She opened three accounts on the JPEX platform in her and Li Shunqian’s names and deposited virtual currencies into the accounts multiple times, including transferring approximately 6,220 Thai Baht from Binance.
Introduced by Lin Zuo, Chen Ying’en used an invitation code to purchase Thai Baht on the OTC platform “Coingaroo” and, under the guidance of General Manager Zhao Jingxian, deposited a total of HKD 1.85 million in cash or by transfer into Zhao Jingxian’s accounts at Tianxing Bank and Lihui Bank, in exchange for over 240,000 Thai Baht.
Unfortunately, on September 13 last year, the Hong Kong Securities and Futures Commission issued a warning stating that JPEX was unlicensed and had not applied for a license. After that, JPEX increased the transaction fees and restricted users from withdrawing funds. On the same day, Chen Ying’en discovered through a blockchain browser that the amounts in the wallets of the three accounts had been transferred without authorization. However, the JPEX account still displayed that the user held JPC and JPP platform coins, Bitcoin, and Thai Baht, with a balance equivalent to approximately 264,000 Thai Baht.
As a result, the two plaintiffs have sued JPEX and related individuals, totaling 7 defendants, including:
– “JP-EX CRYPTO ASSET PLATFORM PTY LTD”, JPEX’s registered company in Australia
– “WEB3.0 TECHNICAL SUPPORT LIMITED”, JPEX’s registered company in Hong Kong
– Holders of the three blockchain wallet addresses
– Zhao Jingxian, the General Manager of the OTC platform “Coingaroo”
– Any person who has implemented, assisted, or participated in transferring the plaintiffs’ assets to the above-mentioned defendants
According to the lawsuit, the two plaintiffs accuse the 1st to 4th and 7th defendants of breaching their fiduciary duties and request the court to rule on the following:
– The defendants must return approximately 52,000 Thai Baht and 190,000 Thai Baht held in trust
– A total of 240,000 Thai Baht or the equivalent of HKD 1.85 million (approximately TWD 7.66 million)
– The defendants must restructure or repay these assets or assume the responsibility of recovering the assets and investigate their whereabouts or provide appropriate compensation
– The defendants and their employees are prohibited from dealing with the aforementioned assets
In addition, the plaintiffs have proposed an alternative solution:
– Treat the two plaintiffs as platform users and consider the balances displayed in their platform accounts as loans, and request repayment from the 1st, 2nd, and 7th defendants
– Regarding the Thai Baht transactions, the plaintiffs pointed out that they paid over HKD 1.85 million to Zhao Jingxian but did not receive the expected over 240,000 Thai Baht, and therefore, they request Zhao Jingxian to return the unjust benefits.
The reason for filing the civil lawsuit at this time, according to Zhu Qiaohua, is that the criminal investigation is still ongoing. However, the statute of limitations for civil lawsuits is only 6 years. If the civil lawsuit is filed after the criminal investigation is completed, there may not be enough time to proceed with the relevant procedures. Additionally, any progress during the civil lawsuit period may also affect the criminal prosecution.
Tasman Tam, the barrister representing the two plaintiffs, stated that he will pursue the recovery of losses based on multiple legal grounds, one of which is the trust responsibility of the JPEX group in this incident. All the involved cryptocurrencies were held in trust by JPEX or related individuals, and the actual owners of the virtual assets are the plaintiffs. Therefore, the defendants must return the relevant virtual assets.
Zhu Qiaohua stated that if this lawsuit is successful, it will serve as an example for other victims and help them recover their losses.
Related reports:
JPEX Case Summary: SFC warning, asset transfer, withdrawal restriction, empty booth, dummy companies… (real-time updates)
After the JPEX collapse: “Increased number of account openings” in Hong Kong cryptocurrency exchanges, is there a big advantage?
Hong Kong SFC publishes “9 suspicious cryptocurrency exchanges”, JPEX’s victim amount rises to HKD 1.61 billion.