By Sandeep Bishnoi, September 21,2023
The unlicensed cryptocurrency exchange, JPEX, is facing a series of troubles as it allegedly collected more than $128 million from users before receiving a reprimand from the Hong Kong Securities and Futures Commission. In response to these issues, JPEX has taken steps to apply for deregistration in Australia.
According to a document obtained by Cointelegraph on September 20, Jieyi Chen, the director of JP-EX Crypto Asset Platform PTY LTD (JPEX), has initiated a deregistration application with the Australian Securities and Investment Commission. In this application, JPEX states that all company members are in agreement regarding the deregistration, that the company has ceased its operations, its assets do not exceed $1,000 Australian dollars, and it has no outstanding liabilities.
The situation escalated on September 13 during the Token2049 conference held in Singapore when the JPEX team reportedly abandoned their corporate booth. This was in response to the arrest of six JPEX employees by Hong Kong police on charges of fraud due to the operation of an unlicensed cryptocurrency exchange. On the same day, the Hong Kong Securities and Futures Commission (SFC) announced that it had received over 1,000 complaints concerning the JPEX platform, with reported losses exceeding 1 billion Hong Kong dollars, equivalent to $128 million.
Amid mounting public scrutiny, JPEX reportedly took the measure of raising its withdrawal fees to 999 USDT to restrict transfers out of the exchange. Prior to this, the exchange had offered highly attractive yields of up to 30% annually on stablecoin staking.
As of now, the JPEX website is inaccessible. Shortly before the website was taken down, JPEX released a compensation plan for its users, promising reimbursement on a one-to-one basis by converting their assets into a stake in the JPEX decentralized autonomous organization by September 21. The exchange also claimed that third-party custodians had “maliciously frozen” platform assets in response to the SFC investigation, which they described as an “unprecedented catastrophe.”