Crypto Exchange JPEX Rolls Out Asset Lock-Up Plan
JPEX has initiated the new staking feature to issue dividend income for its DAO shareholders. However, some investors have raised their concerns regarding the matter.
These investors claim that their cryptocurrency reserves are exchanged without their knowledge or permission. It is important to note that the JPEX exchange is the firm that received a warning from the regulators in Hong Kong recently.
Is JPEX a Decentralized Autonomous Organization?
The firm made estranged claims about being a registered entity with the Securities and Futures Commission of Hong Kong. However, SFC has retained that the firm never applied for a registration with the company. Amidst regulatory clashes, the JPEX has decided to convert into a Decentralized Autonomous Organization (DAO).
On this account, the firm has decided to change the assets of the users into dividend shares for the investors who will agree to lock them for two years.
The Majority of JPEX Users Agreed to the Dividend Proposal
JPEX officials made an announcement recently that shareholder dividend program was completed on 28th September. The announcement claimed that around 68% of the users voted in favor this scheme.
The detail of this plan pertains that users can convert their frozen assets to DAO shares to earn dividend income at 1:1 ratio. JPEX also has a repurchase option at 30% conversion price after 12 months term. The repurchase rate after two year is changed to 100%.
At the same time, JPEX claimed that users who are availing this offer will be able to receive dividend income in the form of a new token listing called JPEX coin. This new deal may entice the investors to not withdraw their funds out of the market that has been dealing with liquidity issues.
One account holder told South China Morning Post (SCMP) on 4th October that her assets were converted without awareness or prior notification. She noted that many users like her found that they were unable to withdraw their assets from JPEX after the accouchement.
Some Users are Facing Withdrawal Issues
The unnamed user told the media that her USDT reserves and other cryptocurrencies have vanished from her portfolio. She claimed that her reserves were converted into JPC coins. This is a low liquidity token with limited utility.
Some other account holders have made similar claims. They retained that they are unable to withdraw their reserves on account of unknown prices. Meanwhile, some users have told SCMP that they were coerced to agree with the plan as there was no option to decline it on the application.
Authorities in Hong Kong have made multiple arrests from JPEX exchange which is accused of running an unregulated trading platform. Police claimed that the platform defrauded around 2300 people out of 1.4 billion HK dollars that are translated into $178 million. To deal with the matter the agency has also set up a task force in order to monitor illegal activities from crypto exchanges.
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