Japanese crypto exchange JPEX to pause interest rewards as partners freeze funds Japanese crypto exchange JPEX to pause interest rewards as partners freeze funds
JPEX will pause its Earn feature due to fallout from regulatory complaints.
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Updated: Sep. 17, 2023 at 10:15 pm UTC
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The Japan-based crypto exchange JPEX said it will pause a key feature at the start of the week in an announcement published Sept. 17.
JPEX said that it will delist all Earn Trading transactions on Sept. 18. Much like other staking or earn services, this feature allowed users to deposit assets and provide liquidity in exchange for rewards. Under the service halt, users cannot place new earn orders, but existing orders will continue to generate rewards until their end date.
The service halt does not appear to apply to all trading on JPEX, contrary to a report from the South China Morning Post that cites the same blog post.
Nevertheless, the issue seems to extend beyond the affected Earn service. In its latest announcement, JPEX said that complaints from Hong Kong authorities have led its third-party market maker partners to freeze funds. Those broken relationships have in turn led to reduced liquidity, higher operating costs, and operational difficulties at JPEX.
The company said it is working with its partners to restore liquidity but would not announce further details until negotiations are final.
Service halt follows other developments
JPEX’s latest service reduction is just the latest event in a series of developments that concern its allegedly insufficient regulatory standing.
The Hong Kong Securities and Futures Commission (SFC) complained about JPEX’s various practices including, its offer of returns on USDT, on Sept. 13. JPEX acknowledged the complaint on Sept. 14 and responded by adjusting withdrawal fees for the USDT stablecoin. Specifically, the exchange greatly raised USDT withdrawal fees, seemingly allowing the company to keep most of each withdrawal request.
JPEX also temporarily paused another service, its game lobby, on Sept. 15. The company claims that most of its services will remain operational.
It should be noted the SFC’s complaints extend far beyond JPEX’s interest-bearing services. The regulator also complains that the exchange failed to obtain licenses, failed to satisfy customer withdrawals, and falsified partnerships, among other things. Statements from authorities imply that investigations are ongoing and expanding.
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Mike Dalton
Before transitioning to crypto writing in 2018, Mike studied library and information sciences. Currently, he resides on Canada's West Coast.
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