Hong Kong court orders recovery of HK$1.85 million in lawsuit against JPEX crypto company

A Hong Kong court has ordered HK$1.85 million (US$238,000) to be recovered on behalf of two plaintiffs in the first civil action against the JPEX cryptocurrency company at the centre of the city’s biggest financial fraud scandal.

The District Court on Tuesday ruled JPEX had breached its duty and “wrongfully and without authorisation” transferred away assets belonging to plaintiffs Herbert Lee Sung-him and Chan Wing-yan to other unknown crypto wallets.

The plaintiffs claimed JPEX had been holding more than 240,000 USDT, a cryptocurrency also known as Tether, in two wallets that Chan transferred to the platform between July and August last year.

They said those assets were moved out of their accounts to wallets of unknown holders.

Judge Grace Chow Chiu-man noted JPEX had a duty to take care, preserve, manage and transfer assets for the benefit of the wallet holders.

“It seems to me that [Chan] has a strong and obvious case for seeking proprietary relief. Otherwise, she remains in a position of an unsecured judgment creditor,” she said. “There is a genuine need to grant the declarations sought to do fullest justice to [Chan].”

The JPEX Crypto Asset Platform, along with affiliated firm Web 3.0 Technical Support, were named as the first and second defendants by the plaintiffs. The pair also sued “any persons who carried out or assisted in the scheme” when they filed the claims.