- JPEX exchange has pushed ahead with its dividends plan.
- Some customers cry foul play.
- Probe into the exchange mounts as police make more arrests.
Scandal-hit crypto exchange JPEX is pushing ahead with its purported plan of converting the platform into a decentralized autonomous organization (DAO) through a “voluntary,” incentivized asset lock-up plan (DAO Shareholder Dividend Program).
The scheme’s inauguration comes amid a mounting investigation into the exchange’s alleged role in a multimillion fraud case that prompted the Hong Kong Securities and Futures Commission (SFC) to set up a joint crypto working group with the police force.
The Dividends Plan
In an announcement dated October 4, the exchange stated that it would implement the DAO Shareholder Dividend Program progressively following the verification of referendum results, in which 68% of users voted in favor of the plan.
The scheme will allow users to convert their frozen assets to DAO Stakeholder dividends at a 1:1 ratio. JPEX promises to repurchase the dividends at 30% of the conversion price after a year and says there will be a 100% repurchase at the end of the two-year lock-up period.
“Our team is actively negotiating with third-party market makers and aiming to release funds promptly for the platform’s adjustment work. We also commit that, after the program’s implementation, all profits apart from the dividend portion will be used for repurchasing DAO dividends held by users,” the announcement read.
While the exchange touted how it respects the decisions made by its users, not all customers are happy with the dividend plan. Their hope to recover frozen funds lies in the ongoing police investigation.
Customers Cry Foul as Police Arrest Six
One user spoke to the South China Morning Post, claiming that she and other customers could not withdraw all their tokens and cryptocurrency assets from the embattled crypto exchange after the October 4 dividends plan announcement. She also alleged that some assets were transferred without her consent.
In a related development, Hong Kong police arrested six more suspects connected to the JPEX scandal, including the CEO and ex-director of virtual asset money changer CryptoPARD.
Read why the SFC will be tougher on crypto after the JPEX scandal:
SFC Vows Tougher Stance on Sus Crypto Platforms Post-JPEX
Stay updated on the multimillion-dollar fraud allegation on JPEX:
Hong Kong Telecoms Block JPEX in Connection with $166M Fraud