Hong Kong blocks access to JPEX's website and app amid probes

Hong Kong authorities have asked local telecoms providers to block the online access to JPEX, the troubled cryptocurrency exchange said.

Local police have detained at least 11 individuals since launching an enforcement action, raiding dozens of locations in the city and seizing certain assets related to the case, local newspaper South China Morning Post reported today.

In a statement published Wednesday, JPEX said Hong Kong’s Securities and Futures Commission has “unreasonably blocked our mobile application and official website.”

“Since September 13, 2023, the SFC has suddenly made a series of accusations against our platform’s operating model and promotional methods, which we vehemently resent as they were made without investigation or review,” JPEX added.

With its platform blocked in Hong Kong, JPEX urged users to use a virtual private network service to gain access.

“Here, we strongly reiterate that, even in the face of such oppression and unfair treatment, our platform will continue to operate as usual,” JPEX continued. “Users can log into our mobile application or operate on our web version using VPN applications like Surfshark.”

Intensified enforcement

The police’s probe into JPEX came after the SFC warned last week that crypto influencers and the trading platform have “made false or misleading statements on social media,” suggesting JPEX had applied for a virtual asset trading license in Hong Kong.

JPEX said on Sunday that it had suspended some operations and raised withdrawal fees following an ongoing liquidity crisis. 

As of Monday night local time, the police had received 1,641 complaints surrounding the JPEX case with claims that they failed to withdraw their holdings at the exchange, the police said at a briefing on Tuesday. The amount of assets involved, according to the complaints, amounted to around HK$1.19 billion ($152 million), the police said.

DAO proposal

In response to these events, JPEX said Wednesday that it plans to launch a “DAO Stakeholders Dividend Plan.”

Under the plan, JPEX users can convert their assets on the platform to DAO stakeholder dividends at a 1:1 ratio. “We will distribute 49% of the DAO Stakeholder dividends, with a total value of approximately 400,000,000 USDT for subscription and conversion,” the exchange said, adding that it plans to offer repurchase options one year and two years later.

JPEX added that new users will get twice the payout if they subscribe to such DAO stakeholder dividends. “Users who subscribe and become DAO Stakeholders do not need to bear all the operational responsibilities of the platform,” it added.