Crypto Exchange JPEX Suspends Earn Trading Amid Ongoing Investigations in Hong Kong

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Sujha Sundararajan

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October 23, 2023 04:54 EDT

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Cryptocurrency platform JPEX, headquartered in Dubai, is reportedly shutting down some of its operations, as the exchange is facing a probe from Hong Kong police and the financial regulator over suspected fraud.

The company announced Sunday that it would “delist” all transactions associated with its Earn Trading interface on September 18, 2023.

“At that time, users will not be able to place any new Earn order. Existing ongoing Earn orders will continue until the product’s end date to receive reward.”

JPEX: “Unfair Treatment” in Hong Kong

JPEX has pointed fingers at relevant institutions in Hong Kong for their “unfair treatment” toward the exchange. The platform also said that negative news surrounding the company has caused third-party market makers to “maliciously” freeze funds.

“They demanded more information from the platform for negotiation, restricting our liquidity and significantly increasing our daily operating costs, leading to operational difficulties.”

Further, the exchange is negotiating with the market makers to resolve the liquidity shortage to protect the interests of users.

Internet Celebrity Arrested in Connection with JPEX “Rug Pull”

In a separate probe related to the JPEX platform, Hong Kong police have arrested a popular internet celebrity Lam Zuo, for allegedly promoting rug pull crypto exchange JPEX.

Hong Kong police have arrested a Hong Kong internet celebrity on suspicion of promoting Rugpull crypto exchange JPEX. At present, the Hong Kong police have received more than 83 reports against JPEX, involving approximately HK$34 million. https://t.co/gmYi68Uwxn

— Wu Blockchain (@WuBlockchain) September 18, 2023

The arrest comes days after the HK regulator – Securities and Futures Commission (SFC) – issued a warning statement that the “unlicensed” JPEX has been actively promoting its products and services to citizens through social media influencers, key opinion leaders and over-the-counter crypto exchange shops.

Hong Kong police had set up a hotline to report cases and inquires to the public, according to a local news report on Monday. “The police will later search his (Lam Zuo) company in Queen’s Road Central, Central,” it added.

The regulator cautioned the public to be wary of any opportunities that seemed “too good to be true.” Following the warning, a few users reported issues while withdrawing cryptos from their online accounts. They complained that the platform is charging a high withdrawal fee.

The exchange promised on Sunday that it would “gradually adjust the withdrawal fees back to normal levels.” There will be a dedicated withdrawal team responsible for handling emergency withdrawal requests, it added.

“We hope to navigate through these challenging times together with our users.”

The Hong Kong police have received 83 reports against JPEX, involving a total of HK$34 million (roughly $4.3 million), according to Police Commissioner Raymond Siu, who said Saturday during a press meet.

Officers in Hong Kong are in touch with Cyberport and have provided opinions on safeguarding cybersecurity, particularly after perpetrators stole 400 gigabytes of data in a cyber-attack on the company’s file storage server in August.