Cryptocurrency exchange JPEX has stated that third-party market makers have ‘maliciously’ frozen funds causing a liquidity shortage on the platform. This reportedly led to substantial increases in daily operating expenses and operational challenges.
“To protect users’ interests, we are currently negotiating with these third-party market makers to resolve the liquidity shortage as soon as possible,” the statement declared.
JPEX Seeks a Swift Resolution
In a September 17 statement, JPEX announced the delisting of all transactions on its Earn trading interface, effective September 18th. JPEX attributes the suspension of the service to a liquidity shortage caused by third-party market makers.
“We promise to recover liquidity from third-party market makers as soon as possible and gradually adjust the withdrawal fees back to normal levels.”
JPEX states that to ensure the platform stays stable, it must make changes to the structure. It further explains that it will gather input from users and internal staff before putting it forward to a vote.
However, it emphasizes that specifics will only be disclosed after the negotiations have been conducted to prevent potential conflicts.
SFC’s Recent Warning About JPEX
JPEX’s challenges arose following a warning from the Hong Kong Securities and Exchange Commission (SFC).
The SFC alleges that JPEX is actively promoting its services to the Hong Kong public. However, it does not hold a VATP licence and has allegedly not even initiated the application process for one.
The SFC outlined several alleged flaws on JPEX’s website in the warning.
It disputes the claim that JPEX has received approval to facilitate cryptocurrency trading.
“It claims on its website and local advertorials to have obtained licences from certain overseas regulators to operate VATP, which is in fact not true,” the statement notes.
The crypto community further received an extended cautionary message from the Hong Kong Monetary Authority.
In the warning, the HKMA stipulated that crypto companies should refrain from identifying themselves as banks and employing banking-related content in their marketing materials.
The clarification emphasized that the term “bank” can only be employed legally by licensed banks, restricted license banks, and deposit-taking companies.
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