Emerging from turbulent times, Hong Kong-based cryptocurrency exchange JPEX is facing turbulence again, due to its new asset lock-up proposal as it endeavours to convert into a Decentralized Autonomous Organization (DAO). The scheme proposes the conversion of user assets into dividend shares, appealing users to have them locked for two years, a reported development by Cointelegraph.
After a referendum conducted on September 28, JPEX claims that 68% of its users endorsed the DAO shareholder dividend program. The suggested plan offers users the chance to transform their currently frozen assets into DAO Stakeholder dividends at an equal ratio. Add to that, JPEX presents a repurchase feature at 30% of the conversion cost after one year and a complete repurchase after two years.
Operating with liquidity hitches, the exchange’s scheme is a manoeuvre to persuade users to arraign their funds on the platform. Those concurring with the proposal have been guaranteed dividends from JPEX, which are to be disseminated through a new token listing, trading charges, and its proprietary token, JPEX Coin (JPC), relative to shareholder dividends.
Nonetheless, the proposal’s execution has sparked criticism, with allegations that assets were converted without user consent or foreknowledge. Along with this, users have reported difficulty in pulling out their assets following JPEX’s plan’s disclosure. A user shared her unfortunate experience, stating the conversion of her assets into JPC, a token of low liquidity and limited use cases, leading to her assets being nearly valueless.
Despite JPEX’s claims of major support, the actual user sentiment is muddled. Allegations have surfaced that users were thrust into accepting the proposal since the application didn’t provide a choice to vote against it.
Amid the controversial dividend proposal, JPEX is battling legal complications, with Hong Kong authorities apprehending several people associated with the platform. The charges levelled against the exchange include fraudulently operating an unauthorised crypto platform, manipulatedly reaping millions of Hong Kong dollars from thousands of users. Hence, though JPEX aims to project a user-centric image with their DAO shareholder dividend program, it unavoidably grapples with deep-seated issues that raise questions about its credibility.
Source: Cryptonews
