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Hong Kong police are investigating allegations of fraud against cryptocurrency trading platform JPEX after investors complained of HK$1.3bn ($166m; £134m) in losses. Eleven people, including popular influencers, have been arrested in connection with the case. This investigation could become one of Hong Kong's largest fraud cases and also tests the effectiveness of new financial regulations as Hong Kong positions itself as a global hub for virtual assets. Last week, it was revealed that JPEX had been operating without a license for virtual asset trading. While the platform claims to have made efforts to comply with local requirements, the Securities and Futures Commission (SFC) dismissed their efforts. Many of the complainants are inexperienced investors who were promised high returns. The arrested influencers, including Joseph Lam and Chan Yee, are known figures on social media platforms. Lam, a barrister turned insurance salesman, described himself as Hong Kong's "Trolling King" on Instagram. The police raid on his house was captured on local TV. Since the arrests, some trading operations on JPEX have been shut down, and web access to the platform has been blocked by Hong Kong authorities. JPEX has also faced complaints from users who are unable to withdraw their funds. Hong Kong Chief Executive John Lee has stated that regulators will closely monitor the situation and ensure investor protection. The requirement for virtual asset trading platforms like JPEX to be licensed aims to establish accountability and compensation mechanisms. However, experts have expressed doubts about the effectiveness of existing laws in preventing illegal operations and protecting investors from losses. Hong Kong is a major financial center in Asia and has become a gateway for investors to mainland China. It is now seeking to position itself as a hub for cryptocurrency trading, following mainland China's ban on cryptocurrencies. The license requirement for platforms like JPEX helps to assert Hong Kong's position as a world financial center and ensure regulatory oversight. Anguished investors have formed Facebook groups to share their experiences and concerns about JPEX. While JPEX claims to be licensed in the US, Canada, and Australia, investigations have found discrepancies in its corporate address and operations. The incident involving JPEX highlights the risks associated with cryptocurrencies and the importance of investor education. Hong Kong authorities aim to enhance public understanding of risks and regulatory frameworks for virtual asset trading platforms.