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#HongKong #JPEX According to reports, on November 5, 2025, the JPEX collapse case entered its first formal prosecution. This prosecution was initiated by the Commercial Crime Bureau (CCB) of the Hong Kong Police Force, involving as many as 13 individuals, including 6 core members of JPEX, as well as 7 OTC operators and KOLs. The successful commencement of this prosecution also marks the beginning of the criminal proceedings in the JPEX case. CCB Chief Superintendent Ernest Wong stated at the press conference that this is the first round of prosecution in the JPEX case, and the charges mainly involve conspiracy to defraud, money laundering, obstruction of justice, and inducing others to invest in virtual assets through fraudulent means or with reckless disregard for the consequences. With a time gap of more than two years, many users have already forgotten what exactly happened with JPEX, and some new users have never even heard of it. The JPEX case occurred in 2023 and is the largest virtual asset fraud case in Hong Kong’s history, involving more than HK$1.6 billion and causing 2,700 investors to suffer losses. The platform operated without a license, attracted users with false promises of high returns, and eventually collapsed in September 2023. However, to be honest, crypto-financial fraud involving more than USD 100 million is indeed rare in Asia. Moreover, JPEX was not a simple “virtual asset fraud case” — its scale was unprecedented, the people involved were complex, and it had a massive cross-border funding chain. More importantly, it tore open the deepest shadow hidden during the regulatory transition period: unlicensed operations, fake regulatory narratives, high-return traps, KOL promotion chaos. One could say JPEX committed nearly every type of crypto-financial fraud possible. At a deeper level, the case also exposed the systemic risks accumulated due to the long-standing conflict between “innovation” and “regulation.” With two years of investigation, 80 arrests, 2,700 victims, losses exceeding HK$1.6 billion, and the masterminds placed on Interpol’s Red Notice list, the JPEX case is no longer merely “Hong Kong’s biggest crypto collapse” — it is a case significant enough to be written into the history of Hong Kong’s virtual asset regulation. A Full Review of the JPEX Case: What Exactly Happened Back Then? JPEX was a crypto exchange founded in 2020, headquartered in Dubai. It promoted itself as a “global digital asset trading platform” and a “Japanese cryptocurrency exchange,” and claimed to hold financial licenses from the United States, Canada, Australia, and Dubai VARA. Then came the dramatic twist: JPEX pulled a classic “concept substitution.” According to investigations by the SFC, these “licenses” were only for foreign exchange services and could not support virtual asset trading. As for the so-called “Japanese cryptocurrency exchange,” both Japan’s Financial Services Agency and Dubai’s VARA clarified that JPEX was not authorized to operate. Public opinion is always two-sided, like the sword of Damocles hanging overhead — if mishandled, backlash follows instantly. JPEX launched massive advertising campaigns in Hong Kong (such as in MTR stations, on bus bodies, and on shopping mall exterior walls), combined with promotion from OTC shops and social media KOLs, gaining significant initial attention. After all, under the regulatory environment of two or three years ago, such overt advertising was extremely rare. Of course, this is also why 7 OTC operators and KOLs were among the defendants. June 2023 The Hong Kong government launched the Virtual Asset Trading Platform (VATP) licensing regime, requiring all platforms to obtain approval from the Securities and Futures Commission (SFC) before they could provide services to retail investors. JPEX, however, did not apply for a license and continued operating without approval — planting the “bomb” for the coming collapse. Early July 2023 Users in mainland China began experiencing difficulties withdrawing funds. At first, people assumed it was an isolated issue or a regional limitation. But JPEX’s next moves instantly triggered public uproar, as rumors of the JPEX collapse began to spread. July 18, 2023 A mainland user surnamed “Yu,” having encountered withdrawal problems, was invited by JPEX to “resolve the issue in person” at a Hong Kong OTC shop. After entering Hong Kong, he was ambushed and beaten by unidentified individuals near the intersection of San Wan Road and Chok Yuen Street in Sheung Shui, close to Cambridge Plaza. His forehead and nose suffered abrasions. After police arrests and questioning, it was revealed that the assailants were executives from JPEX’s investment company. The behavior of luring and assaulting retail investors who sought to defend their rights was unprecedented in the entire history of crypto exchanges and was extremely egregious in nature. This incident could no longer be covered up. The news spread rapidly, and on the well-known Hong Kong forum LIHKG, posts began circulating from mainland users complaining about “failed withdrawals,” claiming the platform lured victims into coming to Hong Kong to “resolve fund issues” and then arranged to have them ambushed. Originally, one would think that after such an incident, JPEX would lay low. Unexpectedly, despite being warned by the SFC for false statements and alleged illegal assault, the promotional activities continued. September 13, 2023 The Hong Kong SFC issued a public warning targeted at JPEX, titled “Warning Statement on Unregulated Virtual Asset Trading Platform.” The core contents of this statement were as follows: JPEX was operating without a license, violating the VATP licensing regime that came into effect on June 1. JPEX used social media influencers and KOLs (such as promotional posts on Instagram) as well as OTC shops to falsely claim it held financial licenses from the U.S., Canada, Australia, and Dubai VARA. JPEX had already been placed on the SFC’s Alert List as early as July 8, 2022. Its products were suspected of “deposit/yield” arrangements, illegal fundraising, and many retail investors had filed complaints about being unable to withdraw funds or sustaining losses. The SFC required all KOLs and OTC shops to immediately stop promoting JPEX and its related services and products. September 13, 2023 After such a direct public warning from the SFC, one would expect JPEX to make some rectifications. However, JPEX’s next actions became even more baffling. Just hours after the statement was published, JPEX quickly responded on its website and blog, claiming that the SFC’s actions were “unfair suppression by the Securities and Futures Commission, forcing us to consider withdrawing our license application in Hong Kong and correspondingly adjusting our future policy development. The SFC should take full responsibility for damaging the prospects of cryptocurrency development in Hong Kong.” In a blog post, JPEX claimed it had publicly announced plans to apply for a crypto trading license in Hong Kong as early as February 2023 and considered Hong Kong a key market, but due to the SFC statement “conflicting with Web3 policies,” it was considering withdrawing its license application and adjusting its regional strategy. What looked like an accusation against Hong Kong authorities for inaction and unfair treatment unexpectedly became an admission that the platform had not obtained a license — directly intensifying investor panic. Complaints surged from several hundred cases before the statement to more than 1,600 cases afterward. Many users rushed to OTC shops seeking help, making the platform’s liquidity crisis publicly visible. Whether it is a bank or an exchange, the consequences of a liquidity crisis are catastrophic. For example, in the case of FTX, liquidity exhaustion was the primary driver of its bankruptcy. September 17, 2023 Only four days later, JPEX released another announcement on its official blog, once again emphasizing that “unfair treatment” by Hong Kong regulatory authorities caused JPEX to suffer massive negative press, which triggered the liquidity crisis. The announcement also mentioned that its third-party market makers had “maliciously frozen” platform funds, further exacerbating the crisis. JPEX stressed that this was not a problem of the platform itself but was caused by external factors. It promised to restore liquidity and gradually adjust fees. The announcement also confirmed that the Earn service would be fully suspended for trading on September 18, and users would be unable to place new orders. Meanwhile, JPEX raised withdrawal fees for USDT from the original 10 USDT to 999 USDT. Considering that the maximum withdrawal limit per transaction on JPEX was only 1,000 USDT, users could effectively withdraw only 1 USDT — essentially “freezing user assets.” Although JPEX explained that this adjustment was necessary to “respond to business changes,” the absence of a recovery timeline triggered maximum panic among the community and users. Rumors of an impending “rug pull” intensified. As of September 18, the number of police reports reached 1,641 cases, involving approximately HK$1.2 billion in losses. September 18, 2023 The Hong Kong Police CCB launched a surprise operation codenamed “Operation Iron Gate,” raiding 20 locations and arresting the first group of 8 suspects, seizing cash, computers, and documents on site. The speed of the police action was extraordinarily fast and rare in the entire history of the crypto industry. October 2023 The number of arrests in the JPEX case increased to 28, including 28-year-old KOL Henry Choi Hiu-tung (founder of Hong Coin). November 5, 2025 This brings us back to the report at the beginning of this article: half a month ago, after two years of investigation, the Hong Kong Police CCB officially prosecuted 16 individuals. Why Was JPEX Able to Expand So Rapidly in Hong Kong After the Regulatory Upgrade? Many people wonder how such a “three-no” exchange (no license, no transparency, no compliance) could rise so quickly. In fact, the rise of JPEX is not mysterious at all. It followed all the templates of Ponzi schemes and exchange scams that have appeared in Asia over the past decade: high returns, fake licenses, KOL hype, offline advertising bombardment… But what truly enabled its explosive growth in Hong Kong was this: It took advantage of the gap between regulatory system upgrades and changes in public awareness. 1. Hong Kong was in a confusing “policy window period” for Web3 Starting in 2023, Hong Kong promoted virtual asset policies at a strategic level: Officials publicly supported Web3 The licensing regime (VATP) was officially implemented Overseas platforms and capital rapidly gathered Hong Kong aimed to become Asia’s virtual asset hub Under such political and policy momentum, the general atmosphere of “Hong Kong welcomes crypto assets” overshadowed the finer details. Ordinary investors mistakenly believed: “Since Hong Kong supports Web3, the platforms here must be safe.” But the truth was the opposite: summer 2023 was the most chaotic period in regulation, and the easiest time for platforms to “fish in muddy waters.” The “time gap” between policy announcements and regulatory enforcement was precisely the loophole JPEX exploited most skillfully. 2. Massive advertising created a “compliance illusion” JPEX’s biggest success was not technology but advertising — blanketing the MTR, airport, buses, and mall façades. As mentioned earlier, such overt advertising was unprecedented in crypto history, making JPEX look like: “A big platform with strength, background, and the confidence to advertise publicly.” The psychological impact of advertising is extremely powerful: Real scams do not hide in the shadows — they often stand in the brightest places. 3. Fake overseas licenses + KOL endorsements formed a “trust closed loop” The reason users were convinced is that JPEX constructed a fake compliance narrative: Claiming to be licensed in multiple countries Using regulator logos to imply endorsement KOLs guaranteeing “these licenses have been checked; it’s very safe” OTC shop staff reassuring retail investors that “Hong Kong’s regulation is strict, so JPEX must be fine” Retail investors believed they had done their “due diligence,” but in reality, all the information was fabricated. JPEX’s manipulation wasn’t sophisticated — it merely targeted human psychology precisely: Compliance illusion + KOL-generated safety = You won’t need to think. 4. High returns created irresistible incentive traps JPEX’s main attraction was its Earn product, promising annualized returns of: BTC 20% ETH 21% USDT 19% This drew in a huge number of investors. By using OTC shops and social media KOLs for promotion, the platform created the image of “low risk, high return.” Where Will Hong Kong’s Virtual Asset Market Go After JPEX? The impact of JPEX is substantial. Short-term regulatory tightening is guaranteed. If you observe Hong Kong’s crypto policy, you’ll notice that although the policy framework has been implemented, approvals remain extremely strict, and only a small number of institutions have succeeded. It is clear that after JPEX, Hong Kong will no longer allow a second “JPEX.” Licensed platforms will become the only entry point. While this means the industry will become healthier, competition will also become more intense.

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#Forks #Soft Forks #Hard Forks Most of us aren’t strangers to the word “fork.” Any high-consensus, large-scale project will encounter forks as it matures — think BTC and ETH. And speaking of timing, here’s a fork headline from today: according to an official announcement, Binance will support the Ethereum (ETH) network upgrade and hard fork. To prepare for the upgrade and hard fork, Binance will perform maintenance on the ETH wallet at 14:00 on November 26, 2025 (UTC+8). Some say: “The rules of a blockchain are written in code, but its future is decided by consensus. Every ‘fork’ is the inevitable result of the co-evolution of technology, consensus, and the ecosystem.” What does that mean? In short, while a blockchain’s underlying logic is deterministic, its development path is determined by consensus — and every fork occurs when differences arise around a technical or ecosystem upgrade. All in all, forks tend to happen around various chain upgrades, especially after rapid evolution across L1s, L2s, and rollup ecosystems. Yet many still hold a surface-level understanding: is a fork just a technical update? A community vote? A price event? Or an ecosystem reshuffle? In reality, it’s all of the above. Blockchains aren’t powerful because they “never change,” but because they can continually “self-evolve” via forking mechanisms. Today, we’ll explain soft and hard forks in the clearest, deepest, and most practical way. https://news.superex.com/articles/16172.html Why must blockchains “fork”? The industry’s most misunderstood question Outsiders often view forks as “chaos” or “conflict,” but true blockchain participants know: forking is the lifeblood of the blockchain world. In Web2, companies call the shots. In blockchains: There’s no boss No CEO No central server No one can force you to upgrade Every chain is like a sovereign nation, and all nodes, miners, and validators are its “citizens.” To amend the law (chain rules), you need “social consensus,” and the forking mechanism is how this “nation” legitimately changes its rules. Forks arise from four fundamental needs: 1) Performance improvements: throughput, fees, and latency never stop being issues Whether BTC, ETH, or the fastest L2, performance isn’t static. Whenever users surge, you’ll see: Insufficient TPS Elevated gas fees Block congestion On-chain activity competing for resources The community proposes upgrades that often redefine block formats, gas mechanics, or consensus parameters — making forks inevitable (and yes, disagreements over upgrade approaches). Performance upgrades are the most common driver of forks. 2) Security: the longer a chain lives, the more it must patch vulnerabilities Blockchains aren’t “absolutely secure” — they become “more secure over time.” Early on, any chain may face: Transaction-validation bugs Timestamp issues Consensus sync delays State-calculation errors Economic-incentive design flaws Large chains undergo security upgrades almost annually, and fixing flaws often means changing old rules — thus requiring a fork. 3) New features: ecosystem expansion needs new rules Ethereum’s journey from PoW → PoS and from EVM extensions to various scaling components is a textbook “feature-iteration-driven fork,” e.g.: Extending virtual-machine capabilities Adding new precompiles (e.g., ZK-related) Supporting new rollup modes Introducing entirely new execution or data-layer logic Each new feature alters underlying rules, so you “upgrade the language” via a fork. 4) Economic-model adjustments: incentives are the soul of a blockchain A chain isn’t only technology — it’s also economics, which must evolve: Change inflation rate? Modify the gas model? Alter miner/validator rewards? Introduce new burn mechanics? Economic parameters directly affect fairness, security, and sustainability — another frequent reason to fork. Bottom line: Forks aren’t chaos; they’re the core mechanism of blockchain evolution. Without forks, there is no future for blockchains. Soft forks: a gentle, backward-compatible “gradual evolution” A soft fork is a backward-compatible upgrade. In short: the new rules are stricter, but old nodes still accept new blocks. That’s the essence of a soft fork — no breaking old systems, no forcing everyone to upgrade immediately. 1) Why are soft forks compatible with old nodes? One sentence: a soft fork narrows old rules rather than expanding them. For example: Old rule: block size ≤ 1 MB New rule: block size ≤ 0.9 MB Old nodes still deem such blocks valid (they satisfy the old rule), while new nodes enforce the stricter limit. Result: old nodes do not reject new blocks. Since old nodes don’t reject new blocks, the chain doesn’t split and everything runs smoothly — that’s the logic behind a “quiet” soft-fork upgrade. 2) Common soft-fork moves Soft forks typically involve: Adding stricter validation logic Imposing extra constraints on transaction formats Disabling certain operations Introducing additional rules without confusing old parsers In other words, soft forks “don’t disturb old logic” while enhancing the chain. 3) Why do major chains prefer soft forks? Lowest community cost: not everyone must upgrade simultaneously; consensus remains intact. Lowest risk: no two chains, no new coins, no mapping headaches. User invisible: exchanges, wallets, staking, and apps keep running. Ecosystem continuity: big chains avoid “splits” at all costs; soft forks enable the smoothest evolution. Thus BTC, ETH, Solana, and many L2s default to soft-fork paths. Hard forks: a non-backward-compatible “structural reset” If a soft fork is “iOS 14 → 14.1,” a hard fork is “iOS 14 → iOS 18” — a full system remodel. New and old rules do not recognize each other, and nodes can’t mutually validate blocks. Because they’re incompatible, the outcome is obvious: the chain splits into two versions. 1) Why can’t hard forks support old nodes? Hard forks expand rules. For example: Old rule: block size ≤ 1 MB New rule: block size ≤ 2 MB When a new node proposes a 1.8 MB block: It’s valid to new nodes It’s invalid to old nodes (>1 MB) Old nodes reject it Sync breaks immediately Two chains then diverge: One led by the new rules One led by the old rules That’s the essence of hard-fork chain splits. 2) Consequences — an industry-wide “seismic event” Two independent chains Two asset systems (two coins) Split among nodes, miners, validators Wallets, exchanges, and tooling must be rebuilt Liquidity is divided Narratives are reshaped Serious? Absolutely. In this industry, a hard fork is a big event — not merely technical, but systemic. 3) When is a hard fork unavoidable? Despite the cost, some scenarios demand it: Rule-rewrite upgrades: architecture overhauls, VM changes, consensus transitions Fundamental incompatibility: new features old rules can’t parse Core economic redesign: e.g., radically new rewards or gas models Irreconcilable ideology: communities part ways, each with its own chain In short: a hard fork is the most thorough “rebirth” a blockchain can undergo. System-level view: the fundamental differences Block-validation rules differ: Soft forks tighten rules; hard forks expand them. Press enter or click to view image in full size Impact on node ecosystems differs: Soft fork → upgrade optional; Hard fork → upgrade mandatory (or you’re on the old chain). Impact on ecosystem development differs: Soft fork = steady, continuous evolution; Hard fork = rebuild the civilizational stack. Neither is inherently “good” or “bad” — they fit different scenarios. In the L1, L2, and rollup era, fork mechanics are structurally changing With 2024–2025 ushering in multi-layered ecosystems, forking isn’t just a single-chain act — it spans cross-chain coordination. 1) Rollups upgrade far faster than L1s; soft forks become high-frequency Rollups are the leading scaling path and behave like rapidly iterating app-chains — upgrades feel like Web2 software releases. Common patterns: Frequent soft forks Weekly updates Constantly improving compression, data availability, proving systems This “lightweight fork culture” is accelerating the crypto world’s iteration speed. 2) Major L1s prefer soft forks (to avoid political schisms) The more mature the L1, the less it can stomach a hard fork: Large market cap Massive ecosystems Rich DApp landscapes Complex exchange integrations The cost of a hard fork is simply too high Hence L1s increasingly favor soft-fork, incremental upgrades. 3) AppChains fork more like Web2 product updates AppChains are smaller and nimbler; their forks feel like “version bumps” without heavy consensus politics. Upgrades are more flexible, and even hard forks rarely pose systemic risk. Soft/Hard fork trends: the industry is entering a “gentle-upgrade era” Trend 1: Ethereum leads the soft-fork era, avoiding systemic splits Post-PoS, ETH leans toward: Modularity Incremental upgrades Soft-fork priority Emphasis on ecosystem continuity Hard forks only when absolutely necessary Trend 2: Rollups become high-frequency iterators As “upgradable application chains,” rollups upgrade more like auto-updating software — soft forks will be routine. Trend 3: Hard forks serve as “ecosystem reboots” (non-mainstream chains) Smaller, stalled, or struggling chains will rely more on hard forks to “start over.” Trend 4: Regulation increasingly shapes fork paths Expect cases like: Hard forks driven by regulatory demands Soft forks for privacy adjustments Parameter tweaks for compliance Chain evolution is no longer purely technical — it’s the intersection of regulation and engineering. Trend 5: Forks become more automated, predictable, and low-cost Infrastructure is maturing: Automated upgrade tooling Compatibility testing State-migration tech Decentralized governance processes Forks will feel more like “routine maintenance,” not “major political events.” Trend 6: Exchanges play an ever more critical role In fork seasons: Liquidity determines which chain users view as “main” Exchanges shape the public’s main-chain perception Forked coins’ circulation hinges on exchange support User asset safety relies on exchange guarantees Platforms like SuperEx will matter more than ever. Conclusion: Forks aren’t chaos — they’re how blockchains evolve Back to the original question: why do all chains need to fork? Because the magic of blockchains isn’t in “never changing,” but in “getting better without centralized decision-making.” Soft forks deliver gentle evolution; Hard forks deliver structural restarts. Together, they outline the evolutionary path of blockchains for decades to come.

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