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Hong Kong law enforcement is conducting an inquiry into JPEX following a referral from the SFC regulator, over offering suspiciously higher returns for its interest bearing products.
Amid the ongoing investigation by the Hong Kong police, crypto exchange JPEX has suspended its operations along with raising the withdrawal fees on the platform. The development happens amid the ongoing liquidity crisis with JPEX stating that the third-party market makers have “maliciously frozen” the company’s funds.
Hong Kong law enforcement is conducting an inquiry into JPEX following a referral from the Securities and Futures Commission (SFC), the market regulatory authority. The SFC has asserted that the company was conducting operations in the city without a valid license. This marks the first such cautionary action by the regulator since Hong Kong intensified its endeavors to enhance its status as a cryptocurrency hub, drawing in more individual investors.
Although spot trades seem to be ongoing, several users have reported that the platform is imposing a 999 USDT withdrawal fee, with the withdrawal limit capped at 1,000 USDT. Commenting on the development, crypto exchange JPEX said:
“We promise to recover liquidity from third-party market makers as soon as possible and gradually adjust the withdrawal fees back to normal levels.”
The company has temporarily halted its gaming platform and revealed intentions to seek proposals for DAO restructuring from its user base. As of now, the JPEX team has not yet responded to requests for comments.
Hong Kong Police Receives Major Complains on JPEX
The Hong Kong Securities and Exchange Commission (SFC) stated that the JPEX platform made some misleading statements about securing licenses from overseas regulators. SFC stated that JPEX offered suspiciously higher returns for its interest-bearing products.
Hong Kong law enforcement is also gathering complaints associated with JPEX, having received a minimum of 83 reports from concerned users, as reported by the South China Morning Post. The Commercial Crime Bureau in Hong Kong is concurrently conducting an inquiry into the firm, which, as per its website, asserts its headquarters to be in Dubai.
JPEX was notably recognized in Hong Kong for its promotional association with renowned actor Julian Cheung Chi-lam. However, this partnership came to an end when Hong Kong’s SFC included JPEX in its alert list. Cheung’s team subsequently demanded that the platform obtain licensing in Hong Kong if it intended to continue using his image, according to media sources.
JPEX has labeled the actions of Hong Kong’s regulators as “unfair treatment” and has expressed its belief that the platform will remain operational without collapsing.