Binance users in Hong Kong lose $450K in wave of fraud texts: HK police

October 10, 2023 Coin Telegraph

Binance users in Hong Kong lose 0K in wave of fraud texts: HK police

Hong Kong police have issued a warning concerning a recent Binance phishing scam targeting Hong Kong users of the platform.

Hong Kong’s police force has raised the alarm after 11 Hong Kong-based Binance customers were targeted in a wave of phishing scams sent through text messages.

Hong Kong police warned users of the scam in an Oct. 9 post to its Facebook page dubbed “CyberDefender.”

“Recently, fraudsters posing as Binance sent text messages claiming that users must click the link in the message to verify their identity details before a deadline, otherwise their account would be deactivated.”

Beware of scammers. Stay #SAFU! pic.twitter.com/XZMDMKkBJf
— CZ Binance (@cz_binance) October 9, 2023

Police said that once users clicked the link and supposedly “verified” their personal details, hackers were then able to gain full access to their Binance accounts, where they proceeded to steal all of the assets contained within the users’ wallets.

According to the post, the phishing scheme has seen 11 Hong Kong-based Binance customers report combined losses of more than $446,000 (3.5 million Hong Kong dollars) in the last two weeks.

The police have asked any users who believe that they’ve received a potentially fraudulent message to log the suspicious messages on the “fraud prevention” section of its official website.

Additionally, the police displayed a link to a newly published list of verified virtual asset trading platforms, provided by the Hong Kong Securities and Futures Commission (SFC).

Currently, only two cryptocurrency exchanges — HashKey and OSL — are fully licensed for retail investment purposes in Hong Kong.

Established in May, CyberDefender is a project launched by the Cyber Security and Technology Crime Bureau of the Hong Kong Police Force, aimed at increasing local citizen’s awareness of online security risks.

Hong Kong police unveil 'CyberDefender' metaverse platform to combat rising digital crimes. https://t.co/xyqa0iWQxf
— Cointelegraph (@Cointelegraph) May 28, 2023

Meanwhile, Hong Kong crypto investors have been hit hard by scams and fraudulent activity in recent weeks, with the recent JPEX crypto exchange scandal ballooning to an estimated $180 million in losses and more than 2,300 Hong Kong-based investors filing complaints with local police.

JPEX was an unlicensed cryptocurrency exchange that allegedly lured in Hong Kong residents with flashy advertising and “suspiciously” high returns on its lending products. The exchange ratcheted up fees on withdrawals from its platform on Sept. 15, rendering funds inaccessible to its users.

Following the scandal, which has been described as the largest financial fraud ever to hit Hong Kong, the SFC announced that it would publish a list of both fully licensed and “suspicious” crypto platforms in a bid to combat potential fraud.

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Hong Kong to list ‘suspicious’ crypto platforms in wake of JPEX scandal

September 25, 2023 Coin Telegraph

Coin Telegraph

In the wake of the ongoing JPEX scandal, the Hong Kong Securities and Futures Commission says it will issue a public list of suspicious crypto trading platforms.

Hong Kong's financial regulator, the Securities and Futures Commission (SFC) has vowed to step up efforts to combat unregulated cryptocurrency trading platforms in its jurisdiction.

According to a Sept. 25 announcement, the SFC said it will publish a list of all licensed, deemed licensed, closing down and application-pending virtual asset trading platforms (VATPs) to better help members of the public identify potentially unregulated VATPs doing business in Hong Kong.

The SFC said it will also keep a dedicated list of "suspicious VATPs" which will be featured in an easily accessible and prominent part of the regulators' website.

*The new measures being introduced by the SFC to combat unregulated VATPs. Source: Hong Kong SFC*

The move follows the ongoing JPEX crypto exchange scandal which has been accused of promoting its services to Hong Kong residents despite not having applied for a license in the country.

It's estimated to have a financial fallout of around $178 million. At the time of publication, local police have received more than 2,200 complaints from affected users of the exchange.

A total of 11 people including crypto influencers, YouTubers, and employees of the allegedly fraudulent crypto exchange have been taken into custody for questioning.

In a statement, the SFC said the resulting fallout from JPEX "highlights the risks of dealing with unregulated VATPs and the need for proper regulation to maintain market confidence."

The regulators added that it would be working with local police to establish a dedicated channel for citizens to share information on suspicious activity and potential legal breaches by VATPs, as well as better investigating the JPEX incident to help "bring the wrong-doers to justice."

Since Hong Kong regulators introduced the new VATP licencing regime on June 1, only two cryptocurrency trading platforms — Hashkey and OSL Digital — have received a licence that allows them to provide service to retail customers.

Despite the recent catastrophe, the SFC noted that it had "long seen the potential benefits" offered to financial markets by cryptocurrencies and other digital assets. The regulator explained that it had also identified a number of risks associated crypto assets including money-laundering and investor protection concerns.

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JPEX scandal masterminds still at large as 11 suspects taken into custody: Report

September 25, 2023 Coin Telegraph

Coin Telegraph

Hong Kong police said the leaders of the JPEX crypto exchange are still at large and are now enlisting the help of Interpol to track them down.

The masterminds behind Hong Kong’s JPEX alleged crypto exchange scandal — referred to by some as the largest financial fraud to ever hit the city — have eluded authorities despite 11 people already being taken in for questioning in relation to the case.

According to a Sept. 23 report from the South China Morning Post, police have now received more than 2,265 complaints from victims of the exchange, with the total monetary value of the fallout estimated to be in the vicinity of $178 million (1.4 billion Hong Kong dollars).

The complaints appear to be related to difficulties withdrawing cryptocurrency from the platform. On Sept. 15, the JPEX exchange raised its withdrawal fees to 999 USDT.

刚刚跑去问了下香港的朋友jpex跑路了没，回复是没跑路，香港警察也去了，说正常提现，所以没办法抓。

然后说了下，只是提币的手续费是999u而已。

只不过就是单笔提款，最高1000u罢了。

这好像大差不差？？？ pic.twitter.com/qAHL3xgUMI
— 梭教授说 (@hellosuoha) September 14, 2023

So far, the list of people reportedly taken into custody for questioning includes crypto influencer Joseph Lam Chok, who has made numerous attempts to publicly distance himself from the exchange.

Police have also arrested three employees of the JPEX Technical Support Company, along with two YouTubers, Chan Wing-yee and Chu Ka-fai — who have a combined following of more than 200,000 — in relation to the scandal.

Others sought or taken in for questioning include the company's sole director Kwok Ho-lun, a restaurant director, and three celebrities who had reportedly promoted JPEX in some form in the pa.

Hong Kong’s authorities however said the ringleaders of the operation are still on the run. Police added that the investigation was continuing and further arrests were likely in the near future.

Local police have also reportedly enlisted the help of Interpol and other international enforcement agencies after it identified suspicious crypto transfers being made from the JPEX exchange. Police has also requested that local telecommunications providers block access to the exchange’s website.

During the Token2049 conference in Singapore on Sept. 13, the JPEX team allegedly abandoned its corporate booth after Hong Kong police arrested six employees on charges of fraud for operating an unlicensed crypto exchange.

The Platinum sponsor, JPEX, abandoned their booth at #Token2049 on the second day.

On a side note, their logo looks quite similar to FTX. Is that a sign? pic.twitter.com/KZw9o5vNgF
— J O Y (@joyxspacelatte) September 14, 2023

The JPEX scandal first appeared on the radar on Sept. 13 when Hong Kong’s financial regulator notified the public that it had received over 1,000 complaints about the unregistered crypto exchange platform, with claims of losses amounting to over $128 million (HK$1 billion).

The exchange later shuttered a number of its yield-bearing products, and ratcheted up its withdrawal fees to 999 USDT, while blaming its third-party market-makers for “maliciously” freezing liquidity.

At the time, it claimed that it had attempted to register with the relevant authorities and cited “unfair” treatment from the SFC.

In a Sept. 20 statement, the SFC revealed that JPEX had been operating without a license for virtual asset trading.

According to the official website, JPEX purports to be headquartered in Dubai and claims to be licensed for crypto trading activities in the United States, Canada and Australia. Founded in 2020, JPEX claimed to oversee some $2 billion in assets and said its goal was to be included in the world’s top five crypto exchanges.

Deposit risk: What do crypto exchanges really do with your money?

JPEX blames partners for ‘maliciously’ freezing funds, causing liquidity crisis

September 18, 2023 Coin Telegraph

Coin Telegraph

Crypto exchange JPEX has pointed the finger at its third-party market makers for “maliciously” freezing funds which led to the exchange being forced to hike withdrawal fees to battle a liquidity crisis.

Dubai-based cryptocurrency exchange JPEX has slammed regulators and “third-party market makers” for a liquidity crisis that has seen the platform hike withdrawal fees and suspend certain operations.

In a Sept. 17 blog post, JPEX said “unfair treatment” from certain institutions in Hong Kong, along with negative news — caused its third-party market makers to “maliciously” freeze funds.

“They demanded more information from the platform for negotiation, restricting our liquidity and significantly increasing our daily operating costs, leading to operational difficulties.”

Blaming the liquidity crisis, JPEX announced that all operations affiliated with its Earn product would be “delisted” by Sept. 18. Users will no longer be able to place any new Earn orders and existing Earn orders will only continue until the product end date, it said.

Regular spot trading activity appears to remain functional at the time of publication, however, JPEX users are alleging that the platform is currently charging a 999 Tether (USDT) fee for withdrawals, on a maximum amount of 1,000 USDT.

JPEX did not specifically address the high withdrawal fee but pledged to gradually adjust the withdrawal fees "back to normal levels" after it finishes negotiations with the third-party market makers.

“We promise to recover liquidity from third-party market makers as soon as possible and gradually adjust the withdrawal fees back to normal levels,” JPEX said in a statement, noting the details will be announced after negotiations conclude.

In addition to shuttering its Earn product, JPEX announced that it would be using a decentralized autonomous organization (DAO) to collect suggestions regarding its restructuring from users.

Cointelegraph contacted JPEX but did not receive a response by the time of publication.

On Sept. 13, the Hong Kong Securities and Futures Commission (FSC) issued a warning against JPEX for allegedly promoting its services to Hong Kong residents despite not having applied for a license in the country.

In a statement, the SFC wrote that it had observed a “number of suspicious features” concerning the practices of JPEX, including offering very high returns and other discrepancies in how it had marketed itself to the Hong Kong public despite being unlicensed.

An attendee of the Token 2049 conference in Singapore claimed that the JPEX booth at the event had been abandoned the day after the FSC issued its warning.

The Platinum sponsor, JPEX, abandoned their booth at #Token2049 on the second day.

On a side note, their logo looks quite similar to FTX. Is that a sign? pic.twitter.com/KZw9o5vNgF
— J O Y (@joyxspacelatte) September 14, 2023

Local police in Hong Kong have now received at least 83 complaints concerning the exchange, according to a Sept. 18 report from the South China Morning Post.

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jpex crypto exchange