JPEX crypto exchange launches asset lock scheme when some users complain
Crowded crypto exchange JPEX has pushed ahead with a plan to transition its platform into a decentralized autonomous organization (DAO) and lock up user assets for two years, incentivized to distribute shares.
An announcement from JPX on October 4 stated that voting for the “DAO Shareholder Dividend Scheme” had ended on September 28, with 68% of users voting in favor of the plan.
The program involves users converting their currently tied assets to DAO stakeholders at a 1:1 ratio, with JPEX repurchasing 30% of the purchase price after one year and 100% after two years.
In an earlier announcement, JPEX said that users who agree to the plan will receive a share of profits from JPEX through new token listings and trade fees, and will receive a distribution of JPEX Coin (JPC) – the exchange's native token – in proportion to their share of shares.
The scheme appears to be an incentive for consumers to keep their money at the embattled exchange, which is facing financial difficulties.
However, one JPEX user – who asked not to be named – told the South China Morning Post in an Oct. 4 report that her assets were apparently changed without her consent or prior knowledge.
She said she and other users found out they couldn't withdraw their assets after JPEX announced it was going ahead with the plan.
Hong Kong police and the city's Securities and Futures Commission have formed a joint task force to crack down on illegal crypto exchange activities. Meanwhile, the JPX scandal continues to unfold. https://t.co/lOBRNlLs7m
— Cointelegraph (@Cointelegraph) October 5, 2023
“All mine [Tether] USDT and other cryptocurrencies are gone,” the person said. She said her assets were converted to JPC – a less liquid token with fewer use cases.
“Some other users who own the tokens and other assets have also been transferred,” the user said. “With an unknown value and an impossible exit, our property is now a waste paper.”
It is not known whether the people mentioned in the report supported the plan, but some JPEX users previously said they were forced to accept the plan because there was no option to vote for SCMP on the app.
JPEX did not immediately respond to Cointelegraph's request for comment.
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The JPX split scheme came as Hong Kong police arrested several people in connection with the exchange after the region's security watchdogs accused them of operating an unauthorized crypto platform.
Hong Kong police say a Dubai-based money exchange has defrauded at least 2,300 people of $178 million (HK$1.4 billion).
Earlier on October 4, the state's police and security regulator launched a crypto-focused task force aimed at combating illegal activities in crypto exchanges.
Magazine: How to protect your crypto in a volatile market — Bitcoin OGs and experts weigh in.
