JPEX Faces Inaugural Civil Lawsuit: Hong Kong Victims Sue JPEX, Seeking Investigation into Lost Assets and Compensation

In September 2023, JPEX faced large-scale victimization due to illegal promotion and operation in Hong Kong, and a similar situation occurred in Taiwan. According to Ming Pao, two victims have recently filed a civil compensation lawsuit in the regional court, becoming the first civil litigation against JPEX. The plaintiffs, Chan Wing Yan and Lee Sung Him Herbert, have entrusted a law firm to pursue a claim of 240,000 Thai DAI (USDT) or 1.85 million Hong Kong dollars from JPEX Group and seven other defendants. If successful, this lawsuit will serve as a strong legal precedent for other victims. The defendants named in the lawsuit include “JP-EX CRYPTO ASSET PLATFORM PTY LTD,” a registered company in Australia, “WEB3.0 TECHNICAL SUPPORT LIMITED,” a registered company in Hong Kong, three holders of blockchain wallet addresses, Coingaroo’s general manager Zhao Jingxian, and any individuals who assisted or participated in the transfer of the plaintiffs’ assets. The lawsuit states that in July and August of last year, Chan Wing Yan attended a cryptocurrency seminar organized by influencer Lin Zuo and believed that JPEX was a licensed, genuine, and trustworthy virtual asset trading platform. Subsequently, she opened three accounts on the JPEX platform in her and Lee Sung Him’s names, and deposited various cryptocurrencies multiple times, including approximately 6,220 USDT transferred from the Binance platform to the JPEX account. Chen Wing Yan also used the invitation code provided by Lin Zuo to purchase USDT on Coingaroo and, under the guidance of Zhao Jingxian, deposited 1.85 million Hong Kong dollars in cash or via transfer to Zhao’s Tianxing Bank and Lihui Bank accounts in exchange for an equivalent amount of Thai DAI. On September 13th of last year, the Securities and Futures Commission issued a warning stating that JPEX was unlicensed and had not applied for a license. Subsequently, JPEX increased transaction fees and restricted users from withdrawing funds. On the same day, Chen Wing Yan discovered that the funds in her three accounts had been transferred without authorization through a blockchain browser, but the JPEX account still displayed holdings of virtual assets, including JPC and JPP platform currencies, Bitcoin, and USDT, with a balance of approximately 264,000 USDT. The plaintiffs requested the court to declare that the first to fourth and seventh defendants violated their fiduciary duties and must hold approximately 240,000 USDT in trust for the two plaintiffs and investigate the whereabouts of these assets or provide corresponding compensation. The plaintiffs also requested the court to prohibit the defendants or their employees from dealing with these assets and to provide an alternative solution by treating the platform account balances as loans and demanding repayment from the defendants. As of April 18th of this year, the police have received reports from 2,636 victims, involving approximately 1.6 billion Hong Kong dollars, and have arrested 72 individuals, freezing assets worth approximately 228 million Hong Kong dollars, in the JPEX case. The success of this lawsuit may provide a reference for other victims to recover their losses and further promote the resolution of the JPEX incident.

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