Embattled cryptocurrency exchange JPEX has moved forward with a plan that would transition the platform to a decentralized autonomous organization (DAO) and convert user assets into dividend shares with an incentive to lock them in for two years.
October 4 advertisement JPEX said that voting on the “DAO Shareholder Dividend Plan” was completed on September 28, claiming that 68% of users voted in favor of the scheme.
Scheme It includes Allowing users to convert their currently frozen assets into DAO stakeholder dividends at a 1:1 ratio, with JPEX offering the option to buy back 30% of the conversion price after a year and buy back 100% after two years.
In an earlier announcement, JPEX said that users who agreed to the scheme would receive profits from JPEX through the listing of new tokens and trading fees and would receive a distribution of JPEX Coin (JPC) – the exchange’s native token – in proportion to shareholders’ profits.
The scheme appears to be an incentive for users to keep their money on the distressed exchange, which has liquidity issues.
However, one JPEX user – whose identity has not been revealed – told the South China Morning Post on October 4th a report She claims that her assets were apparently transferred without her consent or prior knowledge.
She claims that she and other users found they could no longer withdraw their assets after JPEX’s announcement to go ahead with the plan.
Hong Kong Police and the city’s Securities and Futures Commission have formed a joint task force to crack down on illegal cryptocurrency exchange activities. Meanwhile, the JPEX scandal continues to unfold. https://t.co/lOBRNlLs7m
— Cointelegraph (@Cointelegraph) October 5, 2023
“All I have [Tether] USDT and other cryptocurrencies are gone,” the person said. It claimed that its assets had been transferred to JPC – a low-liquidity token with few use cases.
“Some other users holding tokens and other assets have found them transferred as well,” the user said. “Given the unknown price and the impossibility of withdrawal, our assets are now just paper waste.”
It is not known whether the people quoted in the report voted for the plan, but some JPEX users previously told SCMP that they had to accept the plan because there was no option to vote against it on its application.
JPEX did not immediately respond to Cointelegraph’s request for comment.
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JPEX’s dividend plan comes amid Hong Kong police arresting several people in connection with the exchange as it has been accused of operating an unauthorized cryptocurrency platform by the territory’s securities watchdog.
Hong Kong police say the Dubai-based exchange defrauded at least 2,300 people out of $178 million (HK$1.4 billion).
Earlier on October 4, the police and securities regulator in the region launched a task force focused on cryptocurrencies with the aim of combating illicit activities carried out by cryptocurrency exchanges.
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