An ongoing liquidity crisis simply shocked the crypto marketplace, mainly the JPEX crypto exchange. As a result of this, the crypto exchange stopped some of its operations and raised the withdrawal fees following an ongoing liquidity crisis.
What happened? Let’s uncover the whole scenario in detail.
Who Is Behind the Liquidity Crisis?
JPEX, the world’s leading cryptocurrency exchange and one of the easiest places to buy and sell crypto, suspended its trading activities on Monday. Pointing fingers at third-party market makers and regulators for falsely freezing the funds. The malicious activity resulted in a liquidity crisis, forcing the firm to hike withdrawal fees to fight the ongoing challenge.
The announcement of the same was made by the crypto exchange in a blog post on September 17. “Unfair treatment from particular parties in Hong Kong, along with negative news, made market makers falsely freeze funds”, stated JPEX.
More information from the platform and restrictions on liquidity gradually increased the daily operation costs, leading to operational challenges. However, the firm ensured that the liquidity would be recovered from the third-party market makers as soon as possible, along with gradually adjusting the withdrawal fees back to normal.
As a result of this, JPEX announced that all operations associated with the Earn program are going to end by September 18. Considering the situation, individuals will no longer be able to place any new orders and ongoing orders will remain active until the product end date.
Apart from this, there is no effect of the action on regular trading activities. JPEX crypto exchange charges around 999 USDT for a maximum withdrawal of 1,000 USDT. Apart from this, the gaming platform is also frozen and has announced plans to solicit proposals for Decentralized Autonomous Organization (DAO) reorganization from its users.
What Does the Hong Kong Regulator Say About This?
Hong Kong’s Securities and Futures Commission (SFC) warned about the same. The warning is about the false statement noted by JPEX about achieving licenses from regulators. The regulator also claimed that JPEX promoted a business collaboration that failed to materialize and offered high returns for interest-bearing products.
To handle the situation more fittingly, Hong Kong police and Hong Kong’s Commercial Crime Bureau are making full efforts. The police are collecting complaints related to JPEX and have received around 83 reports for the same.
JPEX in a promotional relationship with actor Julian Cheung Chi-lam also indeed blacklisted the exchange as Hong Kong’s police blacklisted it. The crypto exchange is categorized under ‘unfair treatment’ and is expected to regain its steady operations.
In addition to this, Cheung Chi-lam demanded not to use his image for promotional purposes if the platform was not licensed.
Conclusion
JPEX, a Dubai-based crypto exchange, closed a few of its operations and raised withdrawal fees amid an ongoing liquidity crisis. A third-party market maker and regulators falsely froze the funds. Hong Kong regulatory authorities in response to this claim that the allegation is wrong as JPEX is operating without a license.
