LUCKNOW (CoinChapter.com) — JPEX, the embattled Hong Kong-based cryptocurrency exchange, has announced plans to proceed with the DAO Stakeholder Dividend Plan. This involves the conversion of user assets into shareholder dividends.
However, there’s a catch – these dividends can only be claimed after a two-year waiting period.
JPEX Scandal Victims Complain About Tether Forcibly Converted
On Oct. 4, JPEX announced a successful referendum on Sep. 28, with 68% in favor. The scheme lets users turn frozen assets into DAO Stakeholder dividends at 1:1. Adding new assets may double payouts.
Earlier, JPEX had announced that users who opt into the scheme would be eligible to receive dividends from JPEX through several avenues, including a new token listing, trading fees, and a distribution of JPEX Coin (JPC) – the native token of the exchange – in correlation with their shareholder dividends.
However, controversy arose when a JPEX user, who wished to remain anonymous, disclosed to the South China Morning Post (SCMP) on Oct. 4 that her assets had seemingly disappeared.
“All of my [Tether] USDT and other cryptocurrencies are gone,” she said. She revealed that her assets were converted to JPC, a token with low liquidity and few use cases. “Some other users holding the tokens and other assets have also found them transferred,” she added.
“Given the unknown price and the impossibility of withdrawal, our assets have now become just waste paper,” she further said.
Forced Compliance or Lack of Choice?
The proposed plan has faced criticism from users and financial analysts, who have raised doubts about its economic feasibility.
The crypto exchange has revealed that it actively explores alternative options, such as peer-to-peer trading. This move aims to bolster platform revenue and increase user engagement, influencing the platform’s growth and business strategies.
It remains uncertain if those quoted in the report voted in favor of the plan. Some JPEX users claimed they had to accept the plan as the platform’s app could not vote against it.
Hong Kong police recently arrested multiple individuals connected to the exchange, accusing it of operating an unauthorized crypto platform, according to the region’s securities watchdog. It reported that the Dubai-based exchange defrauded at least 2,300 people of 1.4 billion Hong Kong dollars ($178 million).
On Oct. 4, the region’s police and securities regulator launched a crypto-focused task force to combat illegal activities by crypto exchanges.
