The cryptocurrency world is abuzz with the saga surrounding JPEX, a Hong Kong-based cryptocurrency exchange, over a high-profile alleged fraud worth over $191 million. Recent reports published by The South China Morning Post and the actions taken by Hong Kong authorities have sent shockwaves through the industry. Here are the details…
JPEX restricts withdrawals
The controversy began when JPEX took drastic measures to restrict withdrawals by converting user balances into a non-withdrawable cryptocurrency known as JPC, the platform’s proprietary token. Users were left horrified as their Tether (USDT) holdings and other assets were forcibly converted to JPC and they were unable to access their cryptocurrency balances. The value of JPC plummeted and remained untradable on recognized exchanges, leaving users in despair. “All my USDT and other cryptocurrencies are gone, they were all transferred to JPC… Some other users who held tokens and other assets also saw them transferred,” complained an anonymous user.
This unexpected transformation left users feeling like their assets were turning into “waste paper”. The situation became high-profile when 29-year-old TV actor Cheng Chun-hei was arrested in connection with the case, highlighting the seriousness of the situation. The Securities and Futures Commission (SFC) announced its involvement in the incident, stating that it would cooperate with police units to bring the perpetrators to justice.
Cryptocurrency exchange proposes DAO
The South China Morning Post reported that JPEX was moving forward with a proposal for a decentralized autonomous organization (DAO) that received approval from a majority of voters on September 28. This offering will allow investors to convert their funds into DAO stakeholder dividends at a 1:1 ratio, which can be claimed after two years. Dividends will cover listing fees, transaction fees, and JPEX cryptocurrency tokens. Following the JPEX scandal, Hong Kong authorities acted quickly. A working group consisting of officers from various police units and the SFC has been established to monitor cryptocurrency trading platforms.
The group’s mission is to increase coordination, share information about suspicious activities related to cryptoasset trading platforms, and assess risks. Deputy police commissioner Eve Chung emphasized the importance of this working group, stating that it will facilitate vital intelligence exchange and joint cooperation to protect the public from emerging challenges in the field of virtual asset trading. As the JPEX scandal continues to unravel, the cryptocurrency community is watching closely and Hong Kong authorities remain committed to bringing those responsible to justice.
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