JPEX, a crypto exchange facing scrutiny, has forged ahead with its plan to transform into a Decentralized Autonomous Organization (DAO), despite user claims of asset conversion without their consent. The exchange revealed its “DAO Shareholder Dividend Scheme” on October 4th, following the completion of the voting process on September 28th, which reportedly garnered 68% user approval.
The DAO Shareholder Dividend Scheme
Under this scheme, JPEX offers users the opportunity to convert their currently frozen assets into DAO Stakeholder dividends at a 1:1 ratio. Additionally, JPEX presents a repurchase option, allowing users to reclaim 30% of the conversion price after one year and 100% after two years. This initiative aims to incentivize users to lock up their assets within the exchange, addressing the liquidity issues it has faced.
Example of JPEX’s DAO dividend scheme repurchase options. Source: JPEX
User Concerns and Alleged Asset Conversion
Despite the exchange’s intentions, some users have voiced concerns and claim that their assets were converted without their knowledge or consent. An anonymous user reported the disappearance of their assets, including Tether (USDT) and other cryptocurrencies, which were allegedly transformed into JPEX Coin (JPC) – a token with limited liquidity and utility. According to the user, they and others found themselves unable to withdraw their assets after JPEX announced the plan. The situation has left them feeling that their assets have become worthless.
It is unclear whether the individuals quoted in the report had initially voted in favor of the plan. Some users previously complained that they felt compelled to accept the scheme, as there was no option to vote against it through the exchange’s app.
Ongoing Legal Issues
JPEX’s dividend plan unfolds amidst legal troubles, with Hong Kong authorities arresting several individuals linked to the exchange. The exchange faces allegations of operating an unauthorized crypto platform, with Hong Kong police asserting that it defrauded approximately 2,300 people of $178 million (1.4 billion Hong Kong dollars). Additionally, a crypto-focused task force, jointly launched by regional police and securities regulators, aims to combat illicit activities by crypto exchanges in the area.
