[Beware of investment traps] Is there such a thing as high returns with low risk?

The JPEX virtual asset trading platform fraud case involved more than 2,000 people, with a total amount of around HK$1.6 billion, yet no one has been prosecuted to date. Ye Zhiheng, Executive Director of the Intermediaries Division at the Securities and Futures Commission, said in a television programme¹ that the investigation into the JPEX fraud case, which occurred two years ago, is still ongoing, and that the market will be updated in due course.

The incident has attracted widespread attention. How exactly did JPEX manage to entice so many people to make large deposits? In what ways is JPEX similar to a Ponzi scheme? And does a shortcut to investment exist anywhere in the world that offers high returns, low risk, and a short investment period?

The Police and the Securities and Futures Commission held a press conference on 19 September 2023, stating that JPEX, along with relevant over-the-counter exchange shops (OTC) and KOLs, had made false and misleading statements, vigorously promoting so-called “low-risk, high-return” investments. KOLs even claimed that investing in JPEX meant “making money every day”, flaunting luxury watches, handbags and cars allegedly earned through investment, in an attempt to convince people that the returns were highly attractive. 

JPEX also heavily promoted itself on the MTR and outdoors in Hong Kong, and invited a large number of celebrity KOLs to tout a shortcut to making money. Among them, the most controversial was none other than Joseph Lam, who claimed on social media that anyone investing in JPEX platform coins was guaranteed an annual return of up to 19%, stressing that it was a “safe and stable” investment.

In addition, JPEX claimed to have obtained relevant financial licences in the United States, Canada and Australia, thereby enhancing public confidence in its credibility. A victim who invested a principal amount of as much as seven figures said on a radio programme that she had come into contact with JPEX through WhatsApp groups and YouTube channels operated by influencer KOLs. She said frankly that KOLs had a major influence on her, and that information or tips provided by them would genuinely lead to profits; she even said that after investing, one would “make enough to buy a watch”, and that “many people would rush to believe them”.

This kind of zero-risk, high-return marketing tactic is reminiscent of the classic “Ponzi scheme”. The scheme took place in 1919, when businessman Charles Ponzi claimed to investors that they would be “guaranteed” a 40% return within three months, but in reality it was merely a shell company.

Ponzi used this to keep attracting new participants, using new funds to pay interest to earlier investors. As those early investors received returns, he managed to attract 30,000 investors within seven months. However, when the inflow of new funds could no longer keep pace with the outgoings from the “guaranteed returns”, and there was no real business to support it, the scam finally collapsed a year later in 1920.

This alleged JPEX scam also bears similarities to a “Ponzi scheme” in that it used “high returns, low risk and a short term” as its selling point, created “success” stories to make KOLs or early users profit, and continually lured new investors into the “game”. But when it collapsed, users found it difficult to withdraw their funds, and retail investors who entered later became the biggest losers.

We often hear about Ponzi schemes and investment scams, but why do people keep making the same mistakes? Investors’ expectations of investment instruments usually boil down to “high returns”, “short terms” and “low risk”, and they assess the advantages and disadvantages of investment products based on these three factors. However, is there any investment product in the world that can satisfy all three conditions at the same time?

If an investment product claims to offer “high returns”, “short term” and “low risk” all at the same time, it is very likely an investment scam. To reduce investors’ guard, scammers will often let them enjoy some early gains. Once investors are encouraged to press on and put in a larger sum, they then use various means to “wipe out” the funds. For example, JPEX obstructed users from withdrawing money by imposing exorbitant transaction fees, leaving investors worse off.

Although the three cannot usually coexist, if investors are willing to make trade-offs and give up one of the three key conditions, then do their homework properly, it should not be a problem to find an investment product that suits them in the open market.

If investors choose “high return” and “short term”, they have to forgo “low risk”. One example is short-term investing in the stock market, profiting from capturing short-term share price fluctuations and frequent trading. However, this also involves considerable risk. For example, market manipulators may push up a stock’s price sharply within a few days before selling down their holdings, luring retail investors in; after “cutting the leeks”, they then dump the shares, causing retail investors to suffer losses.

If investors choose "high returns" and "low risk", the trade-off is a willingness to commit to long-term investment. One example is purchasing long-term savings insurance. As long-term savings insurance offers a guaranteed floor from the insurer, it often fits the "low risk" category. Whether it delivers "high returns" depends on whether investors have done their homework and identified the right product for themselves. 10Life also has articles about long-term savings insurance.

Readers can visit:  
【保本投資】長期儲蓄保險點揀？保守型投資者睇一大關鍵 
單一貨幣vs多元貨幣 儲蓄保險潛在回報比拼

If investors choose a “short term” and “low risk” approach, they may need significant capital to generate returns. One example is a fixed deposit. As fixed deposits can only run for a maximum of one year, and some banks offer guaranteed interest rates, they meet the “short term” and “low risk” criteria. They are usually a way for retirees to earn interest steadily with a large sum of capital.

In addition, short-term savings insurance may also meet the requirements of this type of investor. Readers can visit: 
【美元短期儲蓄保險比較2025】波動市下如何穩賺逾4.2%年回報？
【港元短期儲蓄保險比較2025】保證回報邊間好？有3年期產品回報高達4.75%!

In summary, the investment market is ever-changing, and we must remember that “there is no such thing as a free lunch”. Although excellent investment opportunities may appear suddenly, investors should always verify carefully to avoid unnecessary losses.

Further reading: 
【加密貨幣/NFT】甚麼是虛擬資產保險？有甚麼保障？ 

Notes:
1.SFC is still investigating the JPEX case; no one has been prosecuted two years on
2.This article was last updated on 25 August 2025
 

This English version of this article has been generated by machine translation powered by AI. It is provided solely for reference purposes. In the event of any discrepancy or inconsistency between this translation and the original Chinese version, the Chinese version shall prevail.