Police said six people were arrested on Monday as part of an investigation into suspected fraud involving the cryptocurrency exchange JPEX.
Officers said the suspects – four men and two women – were held on suspicion of conspiracy to defraud, and more arrests could be made as their investigation continues.
One of those arrested was Lam Chok, a social media influencer and former lawyer.
He was taken away from his office in Central by police, with officers also seizing suspected evidence including a substantial amount of cash.
"Until 2pm on Monday, police received reports from 1,408 people over the case, involving some HK$1 billion," the force said in response to enquries.
JPEX earlier announced that it was suspending trading, saying "negative news" and "unfair treatment by relevant institutions" had led its partners to freeze funds, resulting in higher running costs and operational difficulties.
“We promise to recover liquidity from third-party market makers as soon as possible and gradually adjust the withdrawal fees back to normal levels,” a statement said.
JPEX said existing orders remain effective until they mature, adding that the platform will continue to operate.
Lawmaker Johnny Ng said around 30 JPEX investors had sought help with him.
“I think the government needs to review the regulations and how to disclose more information more timely to let investors know what they are investing in, and which exchange or entities are legal and regulated," Ng said in a press conference.
One woman told reporters that she had lost more than HK$100,000. "A lot of my friends said they did everything they could to invest, hoping to enjoy good returns in future," she said.
On Friday, the Securities and Futures Commission said JPEX had not applied for a licence to operate in Hong Kong, despite its claim to be “a licensed and recognised platform to facilitate the trading of digital asset and virtual currency”.