JPEX crypto exchange launches asset lock-up plan, some users cry foul

JPEX has pushed ahead with its DAO shareholder dividend program. However, some users claim their assets are being converted without their knowledge.

Under-siege cryptocurrency exchange JPEX is advancing a strategy purported to transform the platform into a decentralized autonomous organization (DAO) and morph user assets into dividend shares, encouraging a two-year lock-up through incentives.

A notification from JPEX on October 4 indicated that the voting process for its DAO shareholder dividend initiative concluded on September 28, asserting a 68% user approval rate for the plan.

The initiative allows users to transmute their presently immobilized assets into DAO Stakeholder dividends on a 1:1 basis. JPEX has proposed a buyback option at 30% of the conversion rate after one year and a full buyback following two years. In a preceding declaration, JPEX communicated that consenting users would accrue dividends from the exchange via a new token listing, trading commissions, and a distribution of JPEX Coin (JPC) — its intrinsic token — in alignment with shareholder dividends.

The initiative seems to coax users into maintaining their funds within the beleaguered exchange, which is grappling with liquidity dilemmas.

Nevertheless, an anonymized JPEX user communicated to the South China Morning Post (SCMP) in an October 4 report that her assets were seemingly transformed without her consent or advance warning.

She alleges that post-JPEX’s announcement to advance with the plan, she and other users discovered they were incapable of retrieving their assets. “All of my [Tether] USDT and other cryptocurrencies are gone,” she disclosed. She insists her assets were shifted to JPC — a token with scarce liquidity and minimal use cases.

“Some users possessing the tokens and other assets have also identified them as transferred,” she noted, appending, “In the light of the undisclosed price and withdrawal unfeasibility, our assets have effectively been reduced to worthless paper.”

The voting stance of the individuals cited in the report remains uncertain, but some JPEX users previously informed the SCMP of feeling compelled to approve the plan, citing a lack of opposing vote option in the app.

JPEX has not promptly returned Cointelegraph’s appeal for comment. This dividend plan from JPEX is unveiled amid the arrest of several individuals linked to the exchange by Hong Kong police, as accusations loom of it operating an unlicensed cryptocurrency platform by the area’s financial regulatory body.

The Hong Kong police state that the Dubai-based exchange has defrauded a minimum of 2,300 people, amounting to 1.4 billion Hong Kong dollars ($178 million).

In an earlier event on October 4, the local police and securities regulatory body initiated a cryptocurrency-centric task force aimed at subduing unlawful practices by cryptocurrency exchanges.