In a recent development, the JPEX cryptocurrency exchange has announced its decision to suspend trading activities commencing today.

Raymond Siu Chak-yee, the Commissioner of Police, made a significant disclosure on Saturday regarding the recent actions taken against JPEX.

He revealed that the Hong Kong Securities and Futures Commission (SFC) had officially lodged a police report against JPEX just two days prior.

Notably, the police's Commercial Crime Bureau has now taken up the task of conducting a thorough investigation into this matter.

This development follows the SFC's warning, issued on Wednesday, urging potential investors to exercise prudence when engaging with JPEX.

The SFC raised concerns over the exchange's operations, notably highlighting that JPEX had not submitted any license applications and had purportedly made false claims of having obtained permits from overseas regulatory bodies.

Furthermore, the financial watchdog cautioned against JPEX's advertising of returns on savings products that appeared to be "too good to be true."

Of particular note, the platform's reliance on potentially misleading statements from social media influencers, who were compensated promoters, was a matter of grave concern.

#CryptoNews: The Securities and Futures Commission (#SFC) of Hong Kong issues a warning regarding #cryptocurrency exchange #JPEX, citing "suspicious characteristics." 👀

Investors, take note and exercise caution when dealing with cryptocurrency platforms. Stay informed to…
— VBIT Exchange (@VBitexchange) September 17, 2023<br/> a

Compounding the severity of this situation, numerous users have reported an increasing challenge in accessing their funds.

These concerns have been accompanied by reports of exorbitant withdrawal fees, some reaching as high as 999 USDT.

Consequently, a substantial number of users have resorted to voicing their grievances online, resulting in the registration of 83 formal complaints with the Hong Kong https://www.coinlive.com/news-detail/180647 police.

These complaints encompass virtual assets with an estimated value of approximately HK$34 million or US$4.3 million.

Reports also indicate that Lin Zuo, who had previously declared his intent to become a partner at JPEX and operated an OTC cryptocurrency exchange in Central, was arrested this morning by the Commercial Crime Bureau.

He had earlier provided information to the police to clarify his relationship with JPEX and asserted that he was not a partner but rather sought to play a role in seeking justice for others.

Will JPEX Collapse?

Nonetheless, JPEX has not remained passive amidst this turmoil.

In response to the recent statement issued by the SFC, JPEX has countered by accusing the regulatory agency of what it perceives as an unjust attempt to undermine the exchange.

JPEX contends that it currently resides in a preparatory phase and has not yet submitted its license application, thus raising questions about the fairness of the SFC's actions.

The exchange goes further to assert that the SFC bears a significant responsibility for potentially impairing the future prospects of cryptocurrency development within the Hong Kong region.

The exchange's comment on SFC's statement:

"…can be seen as exerting undue pressure on our platform, reflecting a lack of commitment to the true implementation of Web 3.0 policies in the cryptocurrency industry. The unfair suppression by the SFC has led us to consider withdrawing our license application in the Hong Kong region and adjust our future policy development accordingly."

Additionally, noteworthy developments surrounding JPEX have arisen recently.

Attendees of the Token2049 event in Singapore, held on 13 to 14 September, reported an unexpected occurrence.

It was observed that JPEX employees had vacated their booth on the second day of the event, a surprising turn of events considering the exchange had publicly stated its active participation earlier in the week.

In their defense, the exchange has attributed the crisis to the actions of third-party market makers, whom they allege to have "maliciously frozen" funds.

Furthermore, they have provided assurances to their user base, promising concerted efforts to reinstate liquidity and normalise withdrawal fees.

Additionally, the exchange has unveiled plans for a decentralised autonomous organisation (DAO) reorganisation, inviting user input and proposals.

JPEX added:

"We believe that the platform will not collapse and will continue to operate steadily."