March 27, 2024
JPEX Accuses Partners of Freezing Funds, Causing Liquidity Crisis
Latest Cryptocurrency News

JPEX Accuses Partners of Freezing Funds, Causing Liquidity Crisis

Dubai-based cryptocurrency exchange JPEX has expressed frustration with regulators and third-party market makers, blaming them for a liquidity crisis that has prompted the platform to raise withdrawal fees and suspend certain operations. In a blog post dated September 17, JPEX claimed that it had been subjected to what it deemed as “unfair treatment” by certain institutions in Hong Kong. It stated that negative news and demands for additional information from these institutions had led to a freeze of funds by its third-party market makers. This, in turn, severely restricted the exchange’s liquidity and increased daily operational costs significantly.

As a response to the liquidity crisis, JPEX announced the delisting of all operations related to its Earn product by September 18. Users were notified that they would no longer be able to initiate new Earn orders, and existing ones would only continue until their specified end dates. While regular spot trading remained functional at the time of the announcement, some JPEX users reported that the exchange was imposing a high withdrawal fee of 999 Tether (USDT) on a maximum withdrawal amount of 1,000 USDT.

JPEX did not specifically address the elevated withdrawal fee but pledged to gradually reduce it to normal levels once negotiations with the third-party market makers were concluded. The exchange promised to work on recovering liquidity from these market makers and would provide details regarding the fee adjustments after negotiations were finalized.

Additionally, JPEX revealed plans to involve a decentralized autonomous organization (DAO) to gather user suggestions for its restructuring.

In a related development, on September 13, the Hong Kong Securities and Futures Commission (SFC) issued a warning against JPEX for allegedly promoting its services to Hong Kong residents without obtaining the necessary licensing. The SFC cited several concerning practices by JPEX, including offering exceptionally high returns and inconsistencies in its marketing efforts in Hong Kong. Notably, an attendee of the Token 2049 conference in Singapore reported that the JPEX booth had been abandoned the day following the SFC’s warning.

Furthermore, local authorities in Hong Kong disclosed that they had received at least 83 complaints related to the exchange as of a September 18 report by the South China Morning Post.

Image By WangXiNa

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