A Hong Kong social media influencer, Joseph Lam, known by his Instagram handle "jolamchok," has reportedly been arrested in connection with the liquidity crisis at the cryptocurrency exchange JPEX. This arrest follows investigations into Lam's alleged involvement in promoting the exchange.
Reports suggest that the Hong Kong police conducted a raid on Lam's office, seizing boxes of evidence, including a plastic bag containing banknotes. Lam is suspected of promoting JPEX's services and products to the Hong Kong public through internet celebrities and over-the-counter currency exchangers, as per allegations made by the Hong Kong Securities and Futures Commission.
It has been reported that Lam might have proposed investment opportunities to a chat group dedicated to cryptocurrency investments, with one alleged victim persuaded to invest HK$100,000 (approximately $12,800) in cryptocurrency. However, Lam has yet to respond to requests for comment regarding these allegations .
JPEX has faced criticism for blaming its liquidity crisis on regulators and third-party market makers, leading to increased withdrawal fees and operational suspensions. The exchange has pledged to work toward restoring liquidity and gradually adjusting withdrawal fees to normal levels, with details of these plans expected to be announced after negotiations with market makers conclude.
This incident occurs amid broader concerns in the cryptocurrency industry, with reports of significant capital outflows totaling $55 billion in August. These outflows have impacted not only Bitcoin but also Ethereum and stablecoin liquidity, signaling ongoing challenges in the crypto markets.
