Hong Kong police received over 80 complaints against JPEX crypto exchange Hong Kong police received over 80 complaints against JPEX crypto exchange

Hong Kong police received over 80 complaints against JPEX crypto exchange

Users have complained about being unable to withdraw their assets from JPEX or having to pay exorbitant withdrawal fee of up to 999 USDT.

Hong Kong police received over 80 complaints against JPEX crypto exchange

Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.

JPEX crypto exchange has been named in at least 83 complaints to the Hong Kong police as of Friday, the South China Morning Post reported on Sept. 16. The complaints involve cryptocurrencies worth $4.3 million, the report noted.

Raymond Siu Chak-yee, commissioner of police,ย  disclosed on Saturday that the Hong Kong Securities and Futures Commission (SFC) filed an official police report against JPEX two days ago. He added that the police’s commercial crime bureau is investigating the matter.

SFC calls out JPEX’s ‘suspicious features’

The surge in complaints comes after the SFC issued a statement on Sept. 13, warning Hong Kong users that JPEX is operating without a license. JPEX was placed on the SFC’s Alert List on July 8, 2022, for seeking Hong Kong investors without a license.

In its recent statement, the SFC pointed out several duplicitous and misleading claims and practices of the exchange. For instance, the SFC noted that JPEX’s claims of being “licensed” by overseas regulators to operate a crypto trading platform are “not true.”

On its website, JPEX claims that its operating headquarters are in Dubai and that under the supervision of the Virtual Assets Regulatory Authority of Dubai (VARA), its trading system “has stricter regulatory standards and more transparency and openness in cross-border transactions.” However, JPEX is not on VARA’s public list of licensed virtual assets service providers, the SFC noted.

The SFC also pointed out the very high returns offered by JPEX for some products. For instance, at the time of writing, JPEX offered a 21% annual percentage yield for Ethereum (ETH), 20% for Bitcoin (BTC), and 19% for USD Coin (USDC). Moreover, JPEX’s yield-generating products like ‘Earn,’ and ‘Savings’ are not allowed under the Hong Kong crypto regulatory regime.

The regulator also said JPEX has made misleading and false claims about receiving funding from a Hong Kong-listed company. The commission asked key opinion leaders to stop promoting JPEX and making false claims about JPEX having applied for a crypto license in Hong Kong.

User complaints

As the SFC noted in its statement, several retail investors have reported being unable to withdraw their assets from JPEX or found their balances reduced or altered.

According to the SCMP report, a user shared a screenshot in a Telegram group dedicated to JPEX-related complaints. The screenshot depicted a withdrawal request for 1,000 Tether (USDT) tokens made on Saturday afternoon. However, the withdrawal only resulted in 25 USDT being received, with the remaining amount being withheld by the exchange under the label of “processing fee.”

The administrator of the Telegram group told SCMP that he has received at least 200 “serious” complaints involving over $10 million in crypto.

JPEX says it will “not collapse”

In response to the SFC statement, JPEX accused the agency of unfairly undermining the exchange, since it is in the “preparation phase” and is yet to submit its license application. The exchange noted that the SFC’s statement,

“…can be seen as exerting undue pressure on our platform, reflecting a lack of commitment to the true implementation of Web 3.0 policies in the cryptocurrency industry. The unfair suppression by the SFC has led us to consider withdrawing our license application in the Hong Kong region and adjust our future policy development accordingly.”

JPEX added that the SFC should “bear full responsibility for undermining the prospects” of crypto development in Hong Kong.

On Sept. 14, attendees of Token2049 event in Singapore reported that JPEX employees had abandoned their booth on the second day of the event. This was despite the fact that the exchange claimed on Wednesday that it was “actively participating” in the event.

On Thursday, the exchange adjusted the withdrawal fee for USDT in light of the SFC’s comments. JPEX said that it has set up a special task force to determine future directions and adjustments, and that it will increase the withdrawal limit in the coming days.

One user posted a screenshot on X depicting that the withdrawal limit for USDT was set at 1,000 USDT while the withdrawal fee was set at 999 USDT.

On Sept. 15, JPEX suspended all functions of the platform game lobby to comply with regulatory norms. it added:

“We believe that the platform will not collapse and will continue to operate steadily.”