A crypto influencer was arrested in Hong Kong for a potential $128 million fraud involving 1,400 people
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- Joseph Lam, a crypto influencer, was arrested in Hong Kong on Monday, multiple media outlets reported.
- Police arrested him and five others for "conspiracy to defraud."
- The fraud could involve more than 1,400 people and assets worth around $128 million.
Hong Kong police arrested six individuals, including crypto influencer and YouTuber Joseph Lam, on Monday in connection to the halted trading platform JPEX, the South China Morning Post reported.
Police said the group is suspected of a "conspiracy to defraud" investors, and the case could involve HK$1 billion, or about $128 million, according to complaints lawmakers received from more than 1,400 people.
The arrests come days after Hong Kong's Securities and Futures Commission said JPEX was using influencers and "key opinion leaders" to promote its products and services.
"The SFC wishes to make it clear that no entity in the JPEX group is licensed by the SFC or has applied to the SFC for a licence to operate a [virtual asset trading platform] in Hong Kong," the regulator said in a statement that listed out its suspicions about JPEX, including high returns and suspect business partnerships.
Some of the platform's products offered returns as high as 21%, the Wall Street Journal reported, and Lam had been an active promoter.
Lam had shared on social media over recent days, the Journal reported, that he took steep financial losses and volunteered information to the police.
"The SFC takes this opportunity to warn investors to be cautious about investment opportunities that seem too good to be true," Hong Kong's regulator said. "Investors should be sceptical of investment advice posted on social media platforms and instant messengers by KOLs who are often paid promoters but not investment professionals."
Earlier this month, Faruk Fatih Ozer, the founder of failed crypto exchange Thodex, was sentenced to 11,000 years in prison by a Turkish court. He and his two siblings were given similar jail times for fraud and other charges.