Author | Carl

Editor | Gene

The false propaganda of KOLs has finally been punished by the law. Recently, the JPEX case has further escalated, and the Hong Kong police have arrested 6 people, including KOLs Lin Zuo and Chen Yi, on suspicion of "conspiracy to defraud."

The cryptocurrency industry is impetuous, seeking attention with astonishing behavior, gaining traffic, and reaping benefits. KOLs may have become accustomed to this, but violating the law will result in legal sanctions.

At a time when Hong Kong is vigorously promoting the development of Web3.0, compliance is gradually tightening, and the cryptocurrency industry is moving towards regulation. As Hong Kong legislator Wu Jiezhuang said, the actions of JPEX do not represent the entire industry. It is precisely because Hong Kong wants to vigorously promote the balance between regulation and innovation in Web3.0 policy that it cannot allow bad money to drive out good money.

1. 15 Star KOLs Involved, Lin Zuo and Chen Yi Arrested

On September 18, the Hong Kong police arrested 4 men and 2 women on suspicion of "conspiracy to defraud" in connection with the virtual asset trading platform JPEX. Among those arrested were cryptocurrency KOLs Lin Zuo and Chen Yi.

The Hong Kong police stated that as of 2 p.m. on September 18, a total of 1408 people had reported the JPEX-related incident, involving an amount of 1 billion Hong Kong dollars. The case is under further investigation, and more arrests are not ruled out.

Prior to this, the Hong Kong Securities and Futures Commission issued a warning that the virtual asset trading platform JPEX is not regulated and has not applied for a license from the Hong Kong Securities and Futures Commission. Subsequently, JPEX staff urgently evacuated the Token2049 event in Singapore, and withdrawal restrictions were set on the JPEX exchange, with a withdrawal fee of 999U and a withdrawal limit of 1000U.

According to Techub News, as many as 15 celebrities and KOLs are involved in the JPEX case, including Lin Zuo, YouTuber Chen Yi, Xiao Ruoyuan, Zhong Peisheng, Jordan Chan, Faye Tsui, "Fat Mom," and "Coin Young Master" Huang Zhijie, among others. Taiwanese artist Chen Lingjiu is also implicated.

Before being arrested, Lin Zuo had stated that he would cooperate with the regulatory authorities and personally provide relevant information to the police station to clear his relationship with JPEX, stating, "I am not involved in business or trading with the platform, and I cannot truly find the person in charge of the platform."

Another arrested KOL, Chen Yi, expressed great dissatisfaction with the warning issued by the Hong Kong Securities and Futures Commission regarding JPEX. She posted a video on social media criticizing the Hong Kong government for suppressing JPEX, stating, "It's a pity that the government does not have a fake news law, otherwise we would see all the staff of the Securities and Futures Commission go to jail together."

Currently, JPEX has removed all trading from its financial management page. On September 18, JPEX announced that it had again requested guidance from the Securities and Futures Commission on September 15, but only received a reply that the matter had been handed over to the police for handling.

2. Impetuous Coin Circle KOLs: Hype Murder Case, Scatter Money for Traffic

Before the JPEX case, Lin Zuo, "Coin Young Master" Huang Zhijie, and other KOLs were already controversial.

According to media reports, Lin Zuo came from a wealthy family, obtained a barrister qualification, and voluntarily delisted in 2017. In 2020, he became a financial planning consultant for Prudential in the UK, but was fired for cold-bloodedly hyping a murder case. In July of this year, Lin Zuo publicly stated that he had applied to become a partner of JPEX and opened a "Lin Zuo Coin Trading" in the entertainment district of Central, Hong Kong in August, promoting virtual currency and JPEX.

In June of this year, a shocking murder case occurred in Hollywood Plaza, Hong Kong. In order to attract attention, Lin Zuo stated on social media that he and the suspect owned the same brand of sneakers, with the shoes being 90% new and priced at only 399 yuan, and posted a photo of himself intending to imitate the suspect's appearance, including the same shoes and similar clothes.

Lin Zuo's behavior was criticized by netizens, and under public pressure, the company where Lin Zuo worked issued a statement, stating that Lin Zuo's personal remarks were contrary to the company's values, and decided to terminate the cooperation.

Previously, Lin Zuo had made astonishing statements multiple times, such as publicly stating that 90% of the contestants in the Miss Hong Kong pageant were ugly, publicly sharing a half-naked photo of his girlfriend, questioning whether Chen Kailin and her brother were not born to their parents, and offering to pay 1 million for a DNA test for them.

"Huang Zhijie," the "Coin Young Master," is a typical example of a "loser's counterattack" in the coin circle. According to media reports, Huang Zhijie, formerly known as Guan Zijie, was a swimming coach and was sentenced to 160 hours of community service for stealing a mobile phone. Later, around 2015, Huang Zhijie made his first fortune of eight figures by buying Bitcoin and claimed to be the "first person in Hong Kong's blockchain."

However, Huang Zhijie's outrageous behavior has led to his arrest at least twice. In 2018, Huang Zhijie scattered a large amount of Hong Kong dollars on a rooftop in Sham Shui Po, Hong Kong, but it was exposed that this was done to attract traffic and achieve the goal of "making money." Subsequently, Huang Zhijie was arrested by the police on suspicion of behaving improperly in a public place, and was later released on bail.

In 2019, Huang Zhijie was arrested for selling virtual currency mining machines, involving an amount of approximately 2.6 million yuan. It was reported that Huang Zhijie had long been making false promotions through investment seminars and social media, promoting the Filecoin mining machine, claiming that "it can be profitable in three months," inducing victims to make purchases.

Industry analysts have stated that the modern internet celebrity economy has given rise to excessive commercialization and the excessive pursuit of vanity and exposure. In the coin circle, internet celebrities are even more impetuous. Under the wealth effect of the cryptocurrency industry, many KOLs resort to any means to pursue traffic. Many of their behaviors violate the bottom line of human morality but receive no constraints. However, regardless, violating the law is unforgivable and will ultimately be subject to legal sanctions.

"Because of the false propaganda by KOLs, a large number of users have suffered losses, and several KOLs involved in the case claim that they have also lost money. This is questionable. They have never been transparent about how much money they actually made," the analyst said.

3. Maximum Sentence of 14 Years in Prison

Tony Tong, co-chairman of the Hong Kong Blockchain Association HKBA.club, told Techub News that this is the first enforcement action by the Hong Kong Securities and Futures Commission since the new virtual asset licensing system took effect, and it is the first blow to unlicensed exchanges, which will promote the compliant development of the Web3.0 industry in Hong Kong.

"JPEX has spent a huge amount on advertising in Hong Kong, with the most prominent advertisements. Their advertisements are all over the streets, including KOLs, subways, and billboards, but they do not have a license, nor have they applied for one. This is very unfair to exchanges that have applied for a license. The Securities and Futures Commission needs to properly regulate the cryptocurrency market to prevent more fraudulent activities. This also serves as a reminder to other exchanges that they must apply for a license," Tong said.

Regarding the JPEX incident, Hong Kong legislator Wu Jiezhuang posted on social media, stating that this is the behavior of individual unlicensed exchanges and does not represent the entire industry. It is precisely because Hong Kong wants to vigorously promote the balance between regulation and innovation in Web3.0 policy that it cannot allow bad money to drive out good money.

In other countries and regions, internet celebrities promoting cryptocurrencies are also frequently prosecuted. Recently, the U.S. SEC charged actress Lindsay Lohan, YouTuber Jake Paul, and others with promoting cryptocurrencies on social media. Boxing champion Floyd Mayweather and former NBA player Paul Pierce have also been accused of leading investors into cryptocurrency scams.

Tong advised internet celebrity figures in the cryptocurrency industry that before promoting related products, they must clearly understand whether the company and its products are legal and compliant. Promoting unlicensed institutions could involve legal responsibilities and even criminal risks.

Founder of Mura and lawyer Wu Wenqian told Techub News that some celebrities/KOLs have promoted themselves as partners of JPEX online. The term "partner" may make people feel that this is not just ordinary promotion and endorsement. When celebrities endorse cryptocurrency exchanges, they must also be careful about the content of their promotion. If the content is misleading, it may also be considered as conspiracy to defraud. If KOLs promote an unlicensed exchange as having a license online, this may also contain misleading elements.

According to Section 159C of Chapter 200 of the Criminal Offenses Ordinance of Hong Kong, the offense of conspiracy to defraud is punishable by a maximum of 14 years' imprisonment. According to Chapter 210 of the Theft Ordinance of Hong Kong, obtaining another person's property dishonestly by deception can be punished by a maximum of 10 years' imprisonment.

Lawyer Liu Zhengyao of Shanghai Mankun Law Firm told Techub News that in mainland China, KOLs in the cryptocurrency industry also face similar legal risks. Common criminal legal risks are closely related to different sub-areas of the blockchain industry, such as recommending digital collectibles and virtual currencies for project parties, matching purchases and sales of virtual currencies, providing information intermediary services, and disseminating false or untrue information.

Liu Zhengyao suggested that before publishing or forwarding information, KOLs must ensure the authenticity and reliability of the information. For information that is difficult to verify and may have a negative impact on others, it should be avoided as much as possible. It is better to miss out on the traffic dividend from false information than to be harmed by recklessly publishing false information.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。