In response to the ongoing HK$1.3 billion scandal in which Hong Kong police have asked telecom service providers to block access to JPEX’s website, resulting in the arrest of three additional individuals suspected of conspiracy, JPEX has put forth a new dividend plan for its investors.
The investigation into JPEX by the police was prompted by a recent warning from the SFC, which highlighted that crypto influencers and the trading platform had been disseminating false or misleading information on social media.
This misleading information suggested that JPEX had applied for a virtual asset trading license in Hong Kong.
Last week, the JPEX team allegedly abandoned its corporate booth following the arrest of six JPEX employees by Hong Kong police. They were charged with fraud for running an unlicensed crypto exchange.
The Hong Kong Securities and Futures Commission (SFC) reported receiving over 1,000 complaints related to the JPEX platform on the same day, with reported losses totaling over 1 billion Hong Kong dollars ($128 million).
As of Monday night, the police had received a total of 1,641 complaints related to the JPEX case. These primarily revolved around users’ inability to withdraw their holdings from the exchange.
In aggregate, the assets involved in these complaints amounted to approximately HK$1.3 billion ($166 million), as reported by the police during a briefing on Tuesday.
To address the ongoing liquidity crisis, JPEX announced the suspension of some of its operations and an increase in withdrawal fees on Sunday.
Also, to mitigate the ongoing scandal, Hong Kong police have called upon telecom service providers to block access to JPEX’s website.
Additionally, they plan to request the removal of JPEX-associated pages from social media platforms.
Furthermore, the police have questioned Asian film and television star Julian Cheung Chi-lam in connection with the alleged HK$1.3 billion ($166 million) fraud linked to the JPEX.
Cheung was interrogated at a police station on Thursday morning, and although no arrest was made, the investigation remains ongoing.
Hong Kong’s JPEX Faces Legal Troubles and Deregistration in Australia
Eleven individuals have now been apprehended in connection with the alleged conspiracy to defraud linked to the unlicensed cryptocurrency exchange, JPEX, as three more men were recently taken into custody.
Simultaneously, the SFC has refuted JPEX’s assertions that it sought guidance from the regulator to comply with legal requirements but received no positive response.
“The SFC affirms that JPEX has never approached the SFC in respect of any potential licence application, and that no entity in the JPEX group is licensed by the SFC or has applied to the SFC for a licence to operate a virtual asset trading platform in Hong Kong. As such, there has been no communication between the SFC and JPEX on licensing-related matters.”
Yesterday, the troubled Hong Kong-based crypto exchange, JPEX, has initiated a process for deregistration in Australia.
According to a filing dated September 20, Jieyi Chen, the director of JPEX, submitted an application for deregistration to the Australian Securities and Investment Commission.
The filing asserts that all company members consent to the deregistration, the firm is no longer conducting business, its assets do not surpass $1,000 Australian dollars, and it bears no liabilities.
As of now, the website is inaccessible. Shortly before it went offline, JPEX announced a compensation plan for users, pledging reimbursement on a “one-to-one” basis with their assets being exchanged for a stake in the JPEX decentralized autonomous organization by September 21.
The exchange also claimed that third-party custodians had “maliciously frozen” platform assets due to the SFC investigation, resulting in an “unprecedented catastrophe.”
JPEX Introduces DAO Stakeholders Dividend Plan in Response to Regulatory Challenges
In response to the ongoing situation, JPEX has unveiled a strategic initiative known as the “DAO Stakeholders Dividend Plan,” as announced on Wednesday.
This plan offers JPEX users the opportunity to convert their assets currently held on the platform into DAO stakeholder dividends at a one-to-one ratio.
Under this scheme, JPEX commits to distributing 49% of the total DAO Stakeholder dividends, amounting to an approximate value of 400,000,000 USDT, available for subscription and conversion. Additionally, the exchange intends to introduce repurchase options after one and two years.
As announced in the press release, to ensure that each DAO Stakeholder’s assets generate ample dividend earnings, JPEX will make a repurchase offer at 30% of the original conversion price one year later, specifically after September 20, 2024.
A second repurchase opportunity will be available at 100% of the conversion price two years later, beyond September 20, 2025.
Furthermore, JPEX has specified that new users opting for DAO stakeholder dividends will receive double the payout compared to regular participants.
Importantly, those subscribing to and becoming DAO stakeholders will not be required to shoulder the full operational responsibilities of the platform.
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