JPEX, a cryptocurrency trading platform headquartered in Hong Kong, is facing a significant liquidity challenge due to the intentional freezing of its funds by third-party market makers, whom the company accuses of acting maliciously.
This happened because the companies they rely on to provide cryptocurrency for trading have intentionally locked up JPEX’s funds.
As a result of this crisis, JPEX has decided to stop allowing people to trade on its Earn Trading interface starting from September 18, 2023, at 00:00 (GMT+8).
Any existing trades that people have already set up will continue until they finish, but no new trades can be made.
The Securities and Futures Commission (SFC) in Hong Kong previously cautioned people about a platform that was making misleading claims about having licenses from overseas and offering exceptionally high returns on interest-bearing products.
JPEX didn’t directly talk about the high withdrawal fees, but they promised to gradually lower these fees to their usual rates once they’re done negotiating with the third-party market makers.
Besides closing its Earn product, JPEX has also revealed plans to involve users in its restructuring process through a decentralized autonomous organization (DAO). This means they will seek input and ideas from users about how to proceed.
The Commercial Crime Bureau and Hong Kong police are now looking into this platform, which has received at least 83 reports from worried users.
In a statement, the SFC wrote that it had observed a “number of suspicious features” regarding JPEX’s activities, which included promising exceptionally high returns and other inconsistencies in how it presented itself to the Hong Kong public despite lacking proper licensing.
Also Read: Hong Kong’s Financial Secretary Praises Blockchain, Web3
