Hong Kong exchange JPEX converting user accounts to JPC

Hong Kong exchange JPEX converting user accounts to JPC

JPEX has started to restrict withdrawals by converting user balances to a non-withdrawable cryptocurrency, according to reporting from the South China Morning Post.

The release said statements from an unidentified user who claimed her Tether holdings, along with those of others, had been converted into JPC, JPEX's own token, enabling them to withdraw their crypto balances.

The user, who compared her new account balance to 'waste paper', said that JPC has an unknown price and is impossible to withdraw. CoinGecko's data shows that JPC has a drastically reduced value and is not traded on any recognized exchanges.

The South China Morning Post also suggested that JPEX is beginning to take steps toward implementing its decentralized autonomous organization proposal - a plan that gained majority approval from voters on Sept. 28.

The proposal, according to the SCMP, includes a shareholder dividend scheme that will allow investors to convert funds into DAO stakeholder dividends at a 1:1 ratio. After two years, those dividends can be claimed, including listing fees, trading fees, and JPEX cryptocurrency tokens.

While JPEX has officially announced its plans to transform into a DAO, it has not publicly announced or confirmed that it has forcibly converted user assets.

Some of the earliest customer complaints received by the Hong Kong Securities and Futures Commission in September said that JPEX user account balances had been reduced and altered. It is not yet clear whether the forced conversions are related to earlier issues or to the DAO plan. The recast of the report also leaves it uncertain whether JPEX is converting user assets on a broad scale.

The SFC has issued a significant warning to JPEX on Sept. 13 claiming that the exchange is operating without registration.

At least 18 individuals have been arrested, including social media influencers. The telecom giants have blocked access to the platform, and JPEX's third-party partners have denied the company access to assets.

In response, JPEX has suspended a number of its own services and has asked Hong Kong users to stop depositing assets while insisting that it will remain operational.