Hong Kong Authorities Denies Access to JPEX Citing Ongoing Probe

The Hong Kong enforcement officers detained 11 individuals linked with the alleged fraudulent activities orchestrated via the crypto exchange JPEX. Besides making the arrest, the Hong Kong police directed the local telecommunication providers to restrict access to the JPEX.

The move by the Hong Kong authorities aims to preserve the activities trail within the JPEX platforms. The news of the block coincided with the revelation by the South China Morning Post of arrests estimated above ten. 

The Thursday, September 21 publication illustrated that the Hong Kong authorities had initiated multidisciplinary enforcement action that featured dozens of raids across the city. Besides arrests, the publication indicated that the police seized key assets and equipment linked with the HK$1.3 billion scandal reportedly orchestrated by JPEX.

Hong Kong Authorities Deny Access to JPEX Platforms

A statement issued by the JPEX on Wednesday, September 20, decried the move by Hong Kong’s Securities and Futures Commission (SFC) to deny access to the primary website and the mobile application. The troubled crypto exchange portrayed the bloch as unreasonable. 

The JPEX statement cited that the SFC had accused the platform since September 13 of suspicious features within its operating model. Besides, JPEX alleged that the accusations levied by SFC questioned the promotional methods deployed by JPEX. The crypto exchange wondered about the basis of the conclusion reached by SFC without review or investigation.

JPEX informed the users of the sudden blocking of its mobile application and website platform. The Dubai-originated crypto exchange directed the users to consider using virtual private network services to circumvent the prohibition.

JPEX assured the users that it was strongly condemning the Hong Kong authorities’ oppression and mistreatment. It reiterated that it would continue its usual operations. The firm directed users to leverage VPN applications like Surfshark to access the web version and mobile application.

JPEX Accused of Misleading Statements and Misrepresented Promotional Campaigns

The arrests linked with JPEX personnel come days after the SFC issued a tough warning to crypto influencers and trading platforms. The regulator accuses the influencers of issuing misleading statements in their social media posts. Further, SFC faulted JPEX for alleging it applied for the virtual asset trading license. 

JPEX would, in its Sunday statement, indicate that it was suspending particular operations. Also, the communication informed the users that it was raising withdrawal fees. The ongoing liquidity crisis necessitates the move.

By Monday evening, the Hong Kong police confessed to receiving 1641 complaints regarding the failed withdrawal of their holdings from the JPEX accounts. The police revealed in a Tuesday, September 19 briefing that the amount involved in the complaints was estimated at $152 million. 

JPEX Outlines DAO Proposal

JPEX’s response to the ongoing events portrays an evasive approach, particularly on Wednesday, September 20. It stated that it targets launching the DAO Stakeholders Dividend Plan.

JPEX targets converting assets on its platform into DAO stakeholder dividends equally. Also, it targets distributing 49% of the resulting stakeholder dividends of an estimated value of 400 million USDT for subscription and conversion. 

The exchange demonstrated that it intends to offer repurchase options for 12 months and 24 months later. 

JPEX disclosed that the new users will receive twice the payout upon subscription to the DAO stakeholder dividends. Nonetheless, it clarified that the users subscribing and becoming DAO stakeholders are not necessitated to assume all the operational responsibilities on the platform.