Dubai-based crypto exchange, JPEX, has criticized regulators and “third-party market makers” for a liquidity crunch that led to increased withdrawal fees and halted some operations.
In a blog post dated Sept. 17, JPEX claimed that the “unfair treatment” by certain Hong Kong institutions and negative press led its third-party market makers to “maliciously” lock up funds. Citing the liquidity crunch, JPEX stated that by Sept. 18, all operations related to its Earn product would be removed. As a result, users will no longer be able to create new Earn orders, and existing ones will only continue until the product’s expiration date.
While regular spot trading activity seemed to be operational at the time of the announcement, some JPEX users claimed that the platform was imposing a 999 Tether (USDT) withdrawal fee, capped at 1,000 USDT.
Although JPEX did not directly address the steep withdrawal fee, it committed to gradually returning the withdrawal fees to “normal levels” after concluding negotiations with third-party market makers.
In a statement, JPEX said, “We pledge to restore liquidity from third-party market makers as soon as possible and gradually return the withdrawal fees to normal levels.” The details will be disclosed once the negotiations are completed. In addition to closing its Earn product, JPEX revealed plans to use a decentralized autonomous organization (DAO) to gather user suggestions for its restructuring.
Cointelegraph reached out to JPEX but did not receive a response before the publication deadline. On Sept. 13, the Hong Kong Securities and Futures Commission (SFC) issued a warning against JPEX for allegedly marketing its services to Hong Kong residents without a license.
In a statement, the SFC noted several “suspicious features” about JPEX’s operations, including offering extremely high returns and other inconsistencies in its marketing to the unlicensed Hong Kong public.
A participant at the Token 2049 conference in Singapore reported that the JPEX booth was deserted the day after the SFC issued its warning. Local Hong Kong police have now received at least 83 complaints about the exchange, as reported by the South China Morning Post on Sept. 18.
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