6 people escorted by Hong Kong Police Force (HKPF) on 18 September as they are alleged in fraud for their active involvement in the JPEX cryptocurrency scandal, including internet influencer Joseph Lam, previously lawyer and insurance agent. Youtuber Chan Yee, with a total of 222K subscribers, was also arrested for her conspiracy in fraud to run the JPEX crypto exchange.
The entire JPEX scandal was triggered by a warning statement issued by the Securities and Futures Commission (SFC) of Hong Kong on 13 September 2023, regarding the risk of cryptocurrency exchanged on the JPEX platform being an unregulated platform in Hong Kong as the platform is not licensed. JPEX has then terminated the fund’s withdrawal. Platform users reported to the HKPF that they were unable to withdraw their funds. By the end of September, over 2000 victims reported their cases, incurring a total amount of 1.3 billion HKD. It was said that the JPEX incident could be the largest-scale financial scandal in Asia, while such an enormous impact heavily relied on JPEX’s active usage of KOL and influencer channels for promotion.
JPEX has invested a great amount of money in advertising. In the past year, large advertisements of JPEX have been frequently displayed in the city, especially in those MTR stations with a high flow of people, such as Causeway Bay and Hong Kong station.
Not only the advertisements, but the connection of the KOLs (Key Opinion Leaders) and the influencers with the JPEX platform has also encouraged more people to enroll on the platform as a user to run cryptocurrency exchange. As of the active engagement of the internet nowadays, the impact of influencers is a strong push factor for potential users to understand more about the JPEX platform so as to attract their usage.
Chan Yee Ching, a 20-year-old university student is a frequent user of social media and spends over 8 hours on several platforms each day. “If the large advertisements of JPEX posted up on MTR stations set up an initial impression for the public of the platform, the KOLs has covered a wider range of people’s lives and offer multi-accesses for the public to develop interest into JPEX platform,” shared Chan, “The promotions just popped up frequently, so I also clicked inside to see details.”
Promotions by influencers have brought the platform to more public exposure for a wider range of attractions upon deeper understandings developed by the KOLs. “Ads in public is just a shallow intro. KOLs led the main roles as an encouraging factor,” Tang Chun Chi, aged 32, is an ordinary office man working in Central, “and Chok Lam’s cryptocurrency exchange office is just over there. I know it from his Instagram.” Tang expressed, pointing to the Entertainment Building in front of the Central MTR station.
However, Tang has known JPEX first as local celebrities Chilam Cheung and Jacquline Ch’ng have been the product endorsors for the platform before, revealing that promotions nowadays have included KOLs and influencers into celebrities effect for a product attraction in the Hong Kong community already.
As of the wide use of internet nowadays, celebrities are not the only options to help with product endorsement. KOLs and influencers has joined the circle of impact as well. As of the larger numbers and their much active interactions with the public built up a closer relationship with their followers and subscribers, and thus strengthen the bridge of trust in between, becoming a foundation of a reason accounting for the large pool of victims falling into the JPEX trap with great losses.