In the latest developments of the Hong Kong JPEX cryptocurrency scandal, the platform continues to face scrutiny as it pushes forward with a controversial plan to convert user assets into dividends. This move, however, has sparked concerns as it prevents users from withdrawing their assets, adding fuel to a case of alleged fraud involving over HK$1.5 billion.
The cryptocurrency platform, accused of engaging in suspicious activities, announced its intention to convert stored user assets into shareholder dividends. This plan, known as the “DAO Shareholder Dividend Scheme,” allows users to claim dividends in two years. However, this move has left users in distress as they find themselves unable to withdraw assets.
In response to criticism, JPEX claims that a significant majority of users (68%) voted in favor of the dividends plan in a recent referendum. The company asserts that it respects the decision of its users and is actively working to implement the plan.
Victims of the alleged digital currency fraud have reported the disappearance of their assets from the platform. One user revealed that their Tether tokens and other cryptocurrencies were transferred to the platform’s own digital currency (JPC), leaving them unaware of the exchange rate and unable to withdraw. The user expressed frustration, stating that their assets had essentially become “waste paper.”
JPEX plans to adopt a decentralised autonomous operational style, granting voting rights to all participants in the dividend scheme. This shift is part of the platform’s effort to involve users in decision-making through public voting on a blockchain. The company aims to release funds promptly for necessary adjustments and commits to using profits, excluding the dividend portion, for repurchasing DAO dividends held by users.
Hong Kong police have made further arrests in connection with the JPEX scandal, bringing the total number of suspects to 20. Notably, TV actor Cheng Chun-hei, 29, was among those arrested, accused of being a member of the alleged fraud syndicate behind the cryptocurrency platform. Police impounded assets, including Cheng’s white Porsche, suspected to have been purchased with criminal proceeds.
Financial analysts have criticized the dividends plan, deeming it suspicious and economically viable only if the platform delivers on its promises. Users reported being forced to accept the plan, raising questions about the legitimacy of the voting process on the platform’s app. Blockchain expert Louis Li Sze-chung expressed skepticism, stating that investors may rely on law enforcement to halt the platform’s operations.
As the JPEX crypto scandal unfolds, the implementation of the dividends plan further complicates the situation. Users face uncertainty about the fate of their assets, while arrests linked to the case continue. The platform’s shift to a DAO model and promises to users remain under scrutiny, with the outcome of this high-profile scandal still uncertain.