Dubai-based cryptocurrency exchange JPEX has slammed regulators and “third-party market makers” over a liquidity crisis that has led to the platform raising withdrawal fees and suspending certain operations.
JPEX said in a blog post on September 17 that “unfair treatment” and negative news from some institutions in Hong Kong caused its third-party market makers to “maliciously” freeze funds.
“They require the platform to provide more information for negotiations, restricting our liquidity, significantly increasing our daily operating costs, and causing operational difficulties.”
JPEX blamed the liquidity crisis and announced that all businesses related to its Earn products will be “delisted” on September 18. Users will no longer be able to place any new Earn orders, and existing Earn orders will only last until the product end date, it said.
At the time of publication, regular spot trading activity appears to still be active, however, JPEX users accusation The platform currently charges 999 Tether (USDT) for withdrawals, up to a maximum amount of 1,000 USDT.
JPEX did not specifically address the issue of high withdrawal fees, but promised to gradually adjust withdrawal fees to “normal levels” after completing negotiations with third-party market makers.
“We are committed to restoring liquidity from third-party market makers as soon as possible and gradually adjusting withdrawal fees to normal levels,” JPEX said in a statement, noting that details would be announced after the negotiations conclude.
In addition to shutting down the Earn product, JPEX also announced that it will use a decentralized autonomous organization (DAO) to collect user suggestions for its restructuring.
Cointelegraph reached out to JPEX but had not received a response as of press time.
related: Hong Kong’s central bank warns cryptocurrency companies not to use banking jargon
On September 13, the Hong Kong Securities and Futures Commission (FSC) issued a warning to JPEX for allegedly promoting its services to Hong Kong residents without applying for a license in Hong Kong.
The SFC wrote in a statement that it found “a number of questionable features” in JPEX’s practices, including offering extremely high returns and other discrepancies in the way it marketed itself to the Hong Kong public despite not being licensed.
An attendee at the Token 2049 conference in Singapore claimed that the JPEX booth at the event was abandoned the day after the FSC issued the warning.
Platinum Sponsor JPEX gave up their booth #Token2049 the next day.
By the way, their logo looks very similar to FTX. Is this a sign? pic.twitter.com/KZw9o5vNgF
— Joy (@joyxspacelatte) September 14, 2023
According to a report by the South China Morning Post on September 18, the local police in Hong Kong have received at least 83 complaints about the exchange.
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