Cryptocurrency Exchange JPEX Faces Liquidity Shortage Due to Frozen Funds
Cryptocurrency exchange JPEX has recently experienced a liquidity shortage on its platform. The exchange claims that third-party market makers have intentionally frozen funds, leading to operational challenges and increased expenses. To address this issue, JPEX is currently in negotiations with these market makers to resolve the liquidity shortage as soon as possible.
JPEX Suspends Earn Trading Interface
JPEX announced the delisting of all transactions on its Earn trading interface, effective September 18. This decision was made due to the liquidity shortage caused by the actions of third-party market makers. JPEX assures its users that it is working towards recovering liquidity and gradually adjusting withdrawal fees back to normal levels.
SFC Warns About JPEX’s Unlicensed Activities
JPEX’s challenges are compounded by a warning issued by the Hong Kong Securities and Exchange Commission (SFC). The SFC alleges that JPEX has been actively promoting its services to the Hong Kong public without holding a VATP license or initiating the application process for one. The SFC also disputes JPEX’s claim of receiving approval from overseas regulators for cryptocurrency trading.
Cautionary Message from the Hong Kong Monetary Authority
The Hong Kong Monetary Authority (HKMA) has also issued a cautionary message to the crypto community. The HKMA clarifies that crypto companies should not identify themselves as banks or use banking-related content in their marketing materials unless they are licensed banks or deposit-taking companies. This clarification aims to prevent misleading practices within the industry.
Hot Take: JPEX Struggles with Liquidity Shortage Amid Regulatory Scrutiny
JPEX’s liquidity shortage, allegedly caused by third-party market makers freezing funds, has put the exchange in a challenging position. The exchange is actively working to resolve the issue and recover liquidity to ensure stability for its users. However, JPEX also faces regulatory scrutiny from the SFC and the HKMA, highlighting the importance of complying with licensing requirements and avoiding misleading claims in the crypto industry.
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