Dubai-based cryptocurrency exchange JPEX has criticized regulators and "third-party market makers" over a liquidity crisis that has caused the platform to increase withdrawal fees and suspend certain trades.
In a September 17 blog post, JPEX saying The “unfair treatment” of certain institutions in Hong Kong, coupled with negative news, caused their third-party market makers to “maliciously” freeze funds.
"They demanded more information from the trading platform, which restricted our liquidity and significantly increased our daily operating costs, leading to operational difficulties."
Blaming the liquidity crisis, JPEX announced that all trades affiliated with its Earn product would be “delisted” by September 18. Users will no longer be able to place any new Earn orders and existing Earn orders will only continue until the product end date. He said.
Regular spot trading appears to be continuing at press time; however, JPEX users are alleging that the platform is currently loading a 999 strap (USDT) fee for withdrawals, over a maximum amount of 1,000 USDT.
JPEX did not specifically address the high withdrawal fee, but pledged to gradually adjust withdrawal fees "to normal levels" after finalizing negotiations with third-party market makers.
“We promise to recover liquidity from third-party market makers as soon as possible and gradually adjust withdrawal fees to normal levels,” JPEX said in a statement, noting that details will be announced once negotiations conclude.
In addition to shutting down its Earn product, JPEX announced that it would use a decentralized autonomous organization (DAO) to collect user suggestions on its restructuring.
Cointelegraph reached out to JPEX but did not receive a response at the time of publication.
Related: Hong Kong central bank warns against crypto companies using banking terms
On September 13, the Hong Kong Securities and Futures Commission (FSC) issued a warning against JPEX for allegedly promoting its services to Hong Kong residents despite not having applied for a license in the country.
in a statementThe SFC wrote that it had observed a “number of suspicious features” in relation to JPEX's practices, including offering very high returns and other discrepancies in the way it had been marketed to the Hong Kong public despite having no license.
An attendee at the Token 2049 conference in Singapore claimed that JPEX's booth at the event had been abandoned the day after the FSC issued its warning.
Platinum sponsor, JPEX, abandoned their booth at #Token2049 on the second day.
As a side note, their logo looks quite similar to FTX. Is that a sign? pic.twitter.com/KZw9o5vNgF
- JOY (@joyxspacelatte) September 14, 2023
Local Hong Kong police have received at least 83 complaints regarding the exchange, according according to a Sept. 18 report from the South China Morning Post.
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