The Hong Kong cryptocurrency exchange JPEX recently converted user funds to a native token known as JPC. According to JPEX, affected users will only be able to cash this token out after two years. One affected user said the crypto exchange did not inform them of the conversion rate used to complete this transaction.
Conversion Supposedly Backed by 68% of Users
The beleaguered Hong Kong cryptocurrency exchange, JPEX, has reportedly proceeded with its controversial plan of converting users funds to its in-house digital token known as JPC. As part of the exchange’s plan, users whose assets were converted to the currently illiquid token will only be able to redeem their funds in two years.
The exchange said converting user funds will help it boost its cash flow position and retain investors. JPEX also claimed that the plan had been endorsed by 68% of user. However, according to a report in the South China Morning Post (SCMP), some users of the exchange platform said they were not consulted. Others said they only became aware of this after JPEX unilaterally converted their digital assets.
As previously reported by Bitcoin.com News, JPEX was forced to suspend some trading activities after several people linked to the exchange were arrested by local law enforcement. At the time of the arrests, Hong Kong police claimed to have received 1,641 complaints about JPEX involving $153 million.
However, the SCMP’s Oct. 4 report said that this figure has since grown to $191 million. The report also revealed that a television actor known as Cheng Chun-hei is one of the two suspects who were arrested on the same day.
Users Unaware of Conversion Rate Used
Meanwhile, an unnamed victim of what is now being described as one of Hong Kong’s biggest fraud cases is quoted in the report confirming the conversion.
“All of my USDT [Tether tokens] and other cryptocurrencies are gone, all transferred to JPC [the platform’s own digital currency] … Some other users holding the tokens and other assets have also found them transferred,” the anonymous fraud victim said.
The victim also claimed that the crypto exchange failed to inform affected users of the rate of conversion used to complete this transaction.
What are your thoughts about this story? Let us know what you think in the comments section below.