The police in Hong Kong have frozen assets worth $29.37 million linked to the JPEX scandal, suspected to be the city-state's most significant fraud.

More than 70 individuals have been arrested by Hong Kong authorities in connection to the HK$1.6 billion JPEX cryptocurrency scandal that shocked the city-state.

As per the latest update from SCMP, assets worth approximately HK$230 million, equivalent to $29.37 million, have been frozen, as reported by Police Commissioner Raymond Siu Chak-yee.

In the recent report to the lawmakers, Siu also mentioned that the number of arrests linked to the case has increased to 72, with approximately HK$228 million under the freeze.

He also stated that the police had received 2,636 reports regarding the case, totaling around HK$1.6 billion. The list of detained individuals included social media influencers like Chan Wing-yee, Joseph Lam Chok, and Sheena Leung, who had endorsed the platform through advertisements and set up their own shops.

Following lawmaker Johnny Ng Kit-chong's question, Siu highlighted that the police had recorded 6,330 investment scams in the last year, amounting to losses surpassing HK$5.93 billion. Among these, 2,342 cases were related to cryptocurrency scams involving approximately HK$3.16 billion.

JPEX, one of Hong Kong's largest cryptocurrency exchanges, collapsed after accusations of operating a Ponzi scheme and money laundering emerged in 2023. Subsequently, several individuals linked with JPEX were arrested by the police.

Hong Kong regulators have intensified scrutiny over cryptocurrency exchanges operating in the region in response to these incidents.

The Regulatory Landscape in Hong Kong

Entities dealing with cryptocurrencies were given a deadline of February 29th to apply for the Virtual Asset Trading Platform (VATP) license by the Securities and Futures Commission (SFC), after which the regulator announced that it ceased accepting license applications. Non-compliant platforms were mandated to cease operations locally.

Prior to the deadline, several players withdrew, including Binance-connected HKVAEX and Justin Sun's HTX.

Despite this, Hong Kong maintains its reputation as a crypto-friendly region and strives to become a major hub in Asia. The Hong Kong regulator even sanctioned the first group of spot cryptocurrency exchange-traded funds (ETFs) in April.