TLDR

  • Influencer Chu Ka-fai is now facing a total of four charges in the continuing JPEX cryptocurrency fraud investigation.

  • He is accused of laundering HK$18.78 million through four separate digital bank accounts.

  • The fraud case, which involves losses exceeding $206 million, has impacted more than 2,700 investors.

  • The proceedings will be transferred to the District Court, with the next hearing scheduled for March 27.

Hong Kong authorities have brought further charges in one of the city’s largest cryptocurrency fraud probes. Prosecutors have levied three additional money laundering charges against influencer Chu Ka-fai, also referred to as “Mr. Zhu,” in connection with the failed JPEX exchange.

The updated charges were revealed in a January 2 hearing at the Eastern Magistrates’ Court. Prosecutors allege that from November 2020 to August 2023, Chu laundered around HK$18.78 million via accounts held at ZA Bank, Mox Bank, Livi Bank, and WeLab Bank.

He now faces four counts of money laundering in total and will remain on bail while the case proceeds to a higher court.

JPEX Exchange Case Transferred to District Court

Given the severity of the case and the sums of money involved, the Department of Justice has confirmed it will transfer the case to the District Court. Magistrate Lam Tsz-kang postponed the hearing to March 27 to facilitate the preparation of transfer documents.

Prosecutors contend that Chu either knew or ought to have known the money was the profits of crime. They allege he proceeded to handle and move the funds over the course of almost three years regardless.

The move to elevate the case coincides with heightened regulatory action against unregistered cryptocurrency platforms operating in Hong Kong.

Part of a Wider Investigation Into JPEX Fraud

The allegations against Chu form one segment of a larger probe into the downfall of the JPEX crypto trading platform. Officials estimate the platform swindled more than 2,700 investors, leading to aggregate losses surpassing $206 million.

JPEX did not hold a license to operate in Hong Kong. Nonetheless, it enlisted online influencers, such as Chu, to market its services and draw in investors. Police have arrested over 80 individuals linked to the case.

To date, sixteen individuals, including celebrities and online personalities, have been formally charged. Interpol has issued red notices for three suspects thought to have fled Hong Kong.

Enforcement Tightens Against Unlicensed Crypto Promotion

The JPEX incident has led Hong Kong regulators to intensify their oversight of cryptocurrency promotions. Prior to its collapse, the Securities and Futures Commission had alerted the public to the platform, pointing to inflated promises of returns and deceptive claims about its licensing status.

Authorities state the platform’s marketing approach depended extensively on social media promotion, which has sparked questions about influencer accountability. Investigations into others associated with the case are ongoing, and related activities remain under surveillance.