Hong Kong police have reportedly arrested renowned social media enigma Joseph Lam (Lin Zuo), popularly known as “jolamchok” on Instagram, over his connection to the cryptocurrency exchange, JPEX. Lam’s arrest comes after the examination of the liquidity predicament involving JPEX. The South China Morning Post detailed the event, describing how the police confiscated banknotes and several other items from his workspace.
The Securities and Futures Commission of Hong Kong issued a statement recently, implicating JPEX in encouraging their services and products to the public through internet celebrities and over-the-counter money exchanges. An unnamed source alleges Lin Zuo advocated investment projects to an online community dedicated to cryptocurrency investment. One investor, Miss Chen, reportedly injected 100,000 Hong Kong dollars ($12,800) into crypto after being persuaded by one such scheme.
Joseph Lam has yet to respond to the allegations or confirm his connection to these activities. On September 17, the Instagram star shared a news story denying any damage from the JPEX incident, backing it up with a caption that read, “Whatever doesn’t kill you makes you stronger.”
In the wake of these events, JPEX attributed their liquidity crisis to regulators and third-party market makers. As a result, they were forced to increase withdrawal fees and temporarily cease certain operations. JPEX promised to regain liquidity and return the withdrawal fees to their standard rates as soon as they can.
A Bitfinex report from earlier this month presents the turbulence in the crypto industry, revealing a $55 billion capital outflow in August. The sudden outflow did not merely affect Bitcoin, but also influenced Ether and the stablecoin liquidity.