The situation was so bad that on September 18 the exchange declared that all Earn-related businesses would be delisted.
JPEX, a cryptocurrency exchange located in Dubai, is in the middle of a liquidity crisis, and its response has sparked debate among investors.
JPEX blamed “unfair treatment” by specific institutions in Hong Kong, as well as bad press coverage, in a blog post published on September 17.
It was stated by the exchange that as a result, its third-party market makers froze money and demanded more information for negotiation, resulting in decreased liquidity and unsustainable increases in operating expenses.
In light of this crisis, on September 18 JPEX declared that all Earn-related businesses will be delisted. Due to this decision, users will no longer be able to place new Earn orders; only current orders will be honored until they expire.
Reports that JPEX is implementing a steep 999 Tether withdrawal charge, maximum at 1,000 USDT, are further disturbing its user base, despite the fact that routine spot trading operations are untouched for the time being.
However, after agreements with third-party market makers are finalized, JPEX promises to progressively restore regular withdrawal fee levels, assuring consumers that it would do so in a transparent manner.
The exchange has agreed to provide the new withdrawal charge information after agreements with these market makers and has expressed its intention to regain liquidity from them.
JPEX has also announced that it would employ a decentralized autonomous organization (DAO) to poll its user base for feedback on its reorganization plans.
The exchange is taking this step because it wants its users to have a say in its destiny. The SFC called attention to many inconsistencies that it found in JPEX’s operations, such as the company’s promotion of unrealistically high rates of return.
A participant at the Token 2049 conference in Singapore expressed growing concern when they heard that the JPEX exhibit had been deserted soon after the SFC’s warning was issued.
After several people in Hong Kong lodged concerns with the government, JPEX’s activities came under even closer regulatory scrutiny.
The cryptocurrency industry and regulatory authorities are keeping a careful eye on JPEX as this scenario develops, waiting to see how the exchange handles its liquidity problem and regulatory difficulties.
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