Hong Kong-based crypto exchange platform, JPEX, seemed like moving ahead with a plan that will purportedly transition it into a DAO. As per its plan, the platform will convert user assets to dividend shares with an incentive that holds them for two years. A decentralized Autonomous Organization or DAO is an entity that works out of any central authority.
Scheme Introduced by Crypto Platform
Recently, on October 4, 2023, JPEX remarked in an announcement that voting for its “DAO Shareholder Dividend Scheme” was completed on September 28, 2023. The crypto platform claimed that 68% of the users voted in favor of the scheme.
JPEX’s scheme involves letting users “convert their currently frozen assets to DAO Stakeholder dividends at a 1:1 ratio, with JPEX offering a repurchase option at 30% of the conversion price after a year and a 100% repurchase after two years.”
Moreover, in a previous announcement, the crypto platform said that users who agreed to the scheme would “receive dividends from JPEX through new token listing and trading fees.” Also, they would receive a distribution of JPEX Coin (JPC) in “proportion to shareholder dividends.”
As per a media report, the scheme seems to be an incentive for users to keep their funds on the crypto exchange. Notably, JPEX has been experiencing liquidity issues and under investigation allegations of fraud by Hong Kong police.
Statement by The JPEX User
An anonymous JPEX user spoke about the platform in the South China Morning Post (SCMP) in an October 4, 2023 report. It claims that “her assets had been converted seemingly without her agreement or prior knowledge.”
Along with other users, she found “they could no longer withdraw their assets following JPEX’s announcement to proceed with the plan.”
According to the media report, the person said “All of my [Tether] USDT and other cryptocurrencies are gone.” She claimed her assets were converted to JPC, which is a low liquidity token with few use cases.
As the user further said, “Some other users holding the tokens and other assets have also found them transferred. Given the unknown price and the impossibility of withdrawal, our assets have now become just waste paper.”
However, it’s not known if the people quoted in the report voted in favor of the plan but some JPEX users previously told the SCMP they’d been “forced to accept the plan as there was no option to vote against it on its app.” Notably, there is no official comment from the crypto platform till now.
Meanwhile, the dividend plan by JPEX comes amid Hong Kong police arresting multiple people in connection with the exchange as it is accused of operating “an unauthorized crypto platform by the region’s securities watchdog.”
