A prominent Hong Kong-based social media cryptocurrency influencer known as Joseph Lam, alias ‘jolamchok’ on Instagram, has been arrested by Hong Kong police. This arrest comes in connection with his association with the troubled cryptocurrency exchange, JPEX.
The Arrest of Joseph Lam and SFC’s Statement
The arrest of Joseph Lam, also known as Lin Zuo, has sent shockwaves through the cryptocurrency community. According to a report by the South China Morning Post, Lam was taken into custody due to his affiliation with JPEX. During the operation, police officers raided his office, uncovering crucial evidence, including a plastic bag containing banknotes.
The Securities and Futures Commission of Hong Kong recently issued a statement. Here, they held JPEX responsible for actively promoting its services and products to the Hong Kong public through online celebrities and over-the-counter money changers.
It is alleged that Lin Zuo presented various investment “schemes” within a cryptocurrency chat group. He convinced individuals like Miss Chen to invest substantial sums, such as $12,800 (100,000 Hong Kong dollars), into cryptocurrencies.
Joseph Lam’s Response, Resilience and Cooperation
Further, the report quotes Lin Zuo making statements within the cryptocurrency chat group. He further indicated that people were constantly seeking him to “pay money” and making veiled threats about the increasing sums involved.
On September 17, Joseph Lam shared a news article on his social media. He asserted that he was not directly involved in the JPEX incident. His caption read, “Whatever doesn’t kill you makes you stronger.” Following this post, Lin Zuo, along with his legal representatives, visited the police to provide the necessary information related to the case.
JPEX’s Response and Promises
In response to the liquidity crisis and mounting issues, JPEX blamed regulators and “third-party market makers.” The platform has resorted to increasing withdrawal fees and suspending certain operations.
However, they have promised to work on recovering liquidity from third-party market makers. Also, they would gradually adjust withdrawal fees back to normal levels, with details to be announced post-negotiations.
Impact on Crypto Industry
Notably, this incident occurs against the backdrop of significant capital outflows in the cryptocurrency industry. A recent report from crypto exchange Bitfinex reveals that capital outflows from the industry amounted to a staggering $55 billion in August. These outflows have not only affected Bitcoin but have also had a substantial impact on Ether and stablecoin liquidity.