JPEX, a Dubai-based crypto exchange and lending platform, shuttered operations overnight due to a sudden liquidity crisis on the 17th of September.
According to a statement by the platform, the fault lies with institutions and JPEX’s partners in Hong Kong, who acted unfairly and maliciously, respectively.
According to a spokesperson for JPEX, the platform’s Earn program – which offered APYs as high as 30% for certain cryptocurrencies – will be shut down. All new Earn orders have been disabled, and existing ones will be carried out to term.
The Earn program was singled out, among other alleged infractions, by a notice from Hong Kong regulators published last week.
“Some of the products offered by JPEX appear to be arrangements involving virtual assets such as virtual asset “deposits,” “savings” or “earnings,” which are not allowed under the SFC’s regulatory regime for VATPs (Notes 4 and 5).”
According to members of the community, the exchange’s booth at a Singaporean crypto event was abandoned shortly after the notice. The X user also noticed a striking similarity between the exchange’s logo and that of another famously defunct platform.
Although the platform’s Earn program will be shut down for good, JPEX’s spot trading feature is still up. Withdrawals are also still possible. However, according to feedback from X users, nobody in their right mind would withdraw funds from the platform since withdrawals currently boast a 99% fee, effectively putting an end to them.
JPEX stated that they will eventually bring the fees “back to normal” once the liquidity crisis is over.
“We promise to recover liquidity from third-party market makers as soon as possible and gradually adjust the withdrawal fees back to normal levels. During this period, our dedicated withdrawal team responsible for handling emergency withdrawal requests will continue to prioritize users’ needs. We hope to navigate through these challenging times together with our users.”
Spokespeople for the platform have, naturally, denied any wrongdoing on their part. Instead, JPEX opted to blame their troubles on “unfair treatment” by Hong Kong regulators and malice on the part of their Hong Kong partners, who froze their liquidity shortly after the warning was issued by the SFC.
JPEX has promised to make a comeback and has requested user feedback on how to do so. When such a comeback would be possible, however, is anybody’s guess.