JPEX, a cryptocurrency exchange based in Dubai, has criticized both regulators and what it refers to as "third-party market makers" for a liquidity crisis that has led to a series of measures, including raised withdrawal fees and the suspension of specific operations.
In a blog post dated September 17, JPEX pointed to what it considers "unfair treatment" from certain institutions in Hong Kong, which it claims led third-party market makers to freeze funds "maliciously." This freeze resulted in the exchange being pressed for more information during negotiations, leading to restricted liquidity, considerably higher daily operational costs, and operational challenges.
As a response to the liquidity crisis, JPEX announced that all its businesses associated with its Earn products would be "delisted" on September 18. This means that new Earn orders can no longer be placed, and existing orders will only remain active until the product end date.
Currently, regular spot trading activities on JPEX seem to be functioning, although some users have reported extremely high withdrawal fees, with charges reaching 999 Tether, nearly the maximum of 1,000 USDT.
While JPEX did not directly address the issue of elevated withdrawal fees, it has pledged to gradually readjust these fees to "normal levels" once negotiations with third-party market makers conclude. The exchange expressed its commitment to restoring liquidity from these third-party market makers as soon as possible.
Furthermore, JPEX revealed plans to employ a decentralized autonomous organization (DAO) to gather user input for its restructuring efforts. It's worth noting that on September 13, the Hong Kong Securities and Futures Commission (FSC) issued a warning to JPEX for allegedly promoting its services to Hong Kong residents without obtaining the required license in Hong Kong.
The FSC's statement cited several concerning aspects of JPEX's practices, including offering exceptionally high returns and discrepancies in how it marketed itself to the Hong Kong public without proper licensing. Local authorities in Hong Kong have reportedly received at least 83 complaints related to the exchange, according to a South China Morning Post report dated September 18.
