In a startling turn of events, a Hong Kong-based social media influencer has reportedly been apprehended by local authorities following investigations into the liquidity crisis that befell the Hong Kong-based crypto exchange known as JPEX. The individual in question, identified as Joseph Lam, who goes by the Instagram username “jolamchok,” now faces legal consequences for his alleged association with JPEX. Reports from the South China Morning Post suggest that Lam was taken into custody by Hong Kong police.
Hong Kong police take Joseph Lam into custody
Alongside his arrest, law enforcement officials conducted a search of his office premises, where they reportedly seized several pieces of evidence, including a plastic bag containing banknotes. The situation takes a more intriguing twist as the Securities and Futures Commission of Hong Kong issued a statement directly implicating JPEX in actively promoting its services and products to the local populace through the influence of online celebrities and over-the-counter money changers.
This suggests a deeper involvement of social media influencers like Lam in drawing unsuspecting individuals into the JPEX ecosystem. Additionally, an unconfirmed report has emerged, alleging that Lin Zuo presented various investment “schemes” within a cryptocurrency chat group. One of the purported victims, identified as Miss Chen, was allegedly persuaded to invest a substantial sum of 100,000 Hong Kong dollars (approximately $12,800) in cryptocurrencies.
According to available information, Lin Zuo appeared to acknowledge mounting pressure in the cryptocurrency investment group, occasionally mentioning that people were aggressively seeking repayment. He even issued veiled threats, hinting at an unusually high volume of financial transactions, stating, “The amount of money on these two days is five times the usual.” On September 17, amidst the brewing controversy, the influencer shared a news article on his social media platforms, claiming that he had not been implicated in the JPEX incident.
JPEX’s role and the wider cryptocurrency impact
In a cryptic caption accompanying the post, he asserted, “Whatever doesn’t kill you makes you stronger.” Subsequently, Joseph Lam, accompanied by his legal representatives, voluntarily presented himself to the local police to provide the necessary information as part of the ongoing investigation. The situation has cast a spotlight on JPEX, which has blamed regulators and “third-party market makers” for a liquidity crisis that has prompted the exchange to increase withdrawal fees and suspend certain operations.
In a public statement, JPEX expressed its commitment to restoring liquidity from these third-party entities as swiftly as possible. Additionally, the exchange pledged to gradually revert withdrawal fees to their standard levels, although the specifics of these adjustments would be disclosed following the conclusion of negotiations. This development unfolds against the backdrop of a recent report from crypto exchange Bitfinex, which revealed staggering capital outflows from the cryptocurrency industry.
In August alone, the crypto markets witnessed a massive exodus of approximately $55 billion in capital. This substantial withdrawal of funds did not discriminate, impacting not only Bitcoin but also the liquidity of Ethereum and stablecoins within the crypto ecosystem. The arrest of social media influencer Joseph Lam, known as “jolamchok,” in connection with the JPEX liquidity crisis, has drawn attention to the complex and multifaceted world of cryptocurrency.
As investigations unfold and allegations are substantiated, the crypto community and regulatory bodies will continue to monitor this case closely, seeking to address the implications it holds for the broader industry. Additionally, the ongoing challenges faced by JPEX underscore the need for robust oversight and regulation in the crypto exchange space to safeguard investors and maintain market integrity.
