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Singer referred to Taiwan prosecutors over alleged links to JPEX

Policy & Regulation·June 28, 2024, 9:49 AM

The Ministry of Justice Investigation Bureau in Taiwan has referred Nine Chen, a popular Taiwanese singer-songwriter and television program host, to the prosecutors' office in Taipei on suspicion of aggravated fraud and violations of banking laws for his alleged involvement in a fraud scheme linked to the JPEX cryptocurrency exchange.

 

Local media publication the United Daily News reported on June 26 that as an outcome from an investigation into the matter, the authorities have established that Chen acted as a brand ambassador for JPEX in 2023, receiving 320,000 USDT in the process. While Chen has been referred on to the prosecutors’ office in Taipei, they have yet to press charges against him. 

https://asset.coinness.com/en/news/bc7fd3738088b1bb839ce22d3ec726e1.webp
Photo by Thomas Tucker on Unsplash

Ongoing saga

The first public soundings of an issue in Taiwan relative to JPEX emerged in November 2023. At that time, the Taipei District Prosecutors Office (TDPO) requested that Chang Tung-ying be taken into custody amid allegations of fraud. Tung-ying was understood to have been chief partner at JPEX’s Taiwan office. 

 

The previous month, the TDPO had called Chen in as a witness. The singer had informed local media that he was out of pocket for funds he had held in digital assets via JPEX, incurring a 15% loss. 

 

At that time, the authorities in Taiwan arrested dozens of suspects related to what is believed to be a fraud to the value of approximately $205 million.

 

Hong Kong investigations

JPEX garnered the most negative reaction in Hong Kong. In excess of 2,000 complaints were registered with local regulators within the Chinese autonomous territory relative to the cryptocurrency exchange.  Problems were first reported in September 2023 when the platform outlined that it had experienced a liquidity crisis. Losses in Hong Kong relative to the platform were understood to be in the region of $180 million. 

 

In an effort to deal with the matter, JPEX proposed a plan in October 2023 to transition the business to a decentralized autonomous organization (DAO). Multiple arrests were made by the Hong Kong authorities, with a collection of assets being seized in an effort to gather up funds on behalf of platform customers who found themselves out of pocket.

 

While JPEX hit the headlines in 2023 for questionable activity in Asian markets, the business is actually headquartered in Dubai in the United Arab Emirates (UAE). In September of last year, Dubai’s Virtual Assets Regulatory Authority (VARA) outlined that as far as it was concerned, JPEX wasn’t regulated in Dubai and hadn’t registered with the regulator. 

 

Following the same pattern in Taiwan, JPEX had not registered with the Financial Supervisory Commission (FSC) relative to anti-money laundering (AML) regulations, which it requires crypto platforms to comply with.

 

Taiwanese authorities have experienced issues with a number of crypto platforms over the course of the past 18 months. Aside from JPEX, the founder of ACE Exchange, David Pan, was arrested in January 2024. Charges of money laundering and fraud were brought against him. As with JPEX, there was a connection with Dubai in that Pan was also the founder of Dubai-based crypto exchange ZORIXchange.

 

In November 2023, Bitgin, a local crypto exchange, found itself at the center of an investigation into money laundering.

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