<![CDATA[<figure class="image"><img src="https://cimg.co/news/126039/332810/locked-assets.jpeg" srcset="https://cimg.co/news/126039/332810/responsive-images/locked-assets___media_library_original_1280_853.jpeg 1280w, https://cimg.co/news/126039/332810/responsive-images/locked-assets___media_library_original_1200_800.jpeg 1200w, https://cimg.co/news/126039/332810/responsive-images/locked-assets___media_library_original_900_600.jpeg 900w, https://cimg.co/news/126039/332810/responsive-images/locked-assets___media_library_original_720_480.jpeg 720w, https://cimg.co/news/126039/332810/responsive-images/locked-assets___media_library_original_600_400.jpeg 600w, https://cimg.co/news/126039/332810/responsive-images/locked-assets___media_library_original_300_200.jpeg 300w" width="1280" class="content-img" alt=""><figcaption>Source: Adobe / AIproduction</figcaption></figure><p>The troubled Hong Kong-based crypto exchange JPEX is embroiled in controversy over its recent asset lock-up plan as it seeks to <a href="https://cryptonews.com/news/hong-kong-crypto-exchange-jpex-launches-dao-stakeholder-dividend-plan-amid-scandal-arrests.htm">transition into a decentralized autonomous organization (DAO)</a>.</p><p>The exchange now plans to convert user assets into dividend shares, encouraging users to lock them up for two years, Cointelegraph <a href="https://cointelegraph.com/news/jpex-crypto-exchange-dividend-plan-users-cry-foul-ca">reported</a> on Thursday.</p><h2 id="majority-in-favor-of-dao-plan">Majority in favor of DAO plan</h2><p>In an <a href="https://blog.jp-ex.io/en/dao-shareholder-dividend-program-referendum-results/">announcement</a> from Wednesday, JPEX claimed that 68% of its users had voted in favor of the DAO shareholder dividend program after a referendum was completed on September 28.</p><p>Under the proposed scheme, users can convert their currently frozen assets into DAO Stakeholder dividends at a 1:1 ratio.</p><p>JPEX also offers a repurchase option at 30% of the conversion price after a year and a 100% repurchase after two years.</p><h2 id="incentive-to-keep-funds-on-platform">Incentive to keep funds on platform</h2><p>The exchange aims to incentivize users to keep their funds on the platform, which has been experiencing liquidity issues.</p><p>Users who agree to the scheme are promised dividends from JPEX, distributed through a new token listing, trading fees, and its native token, JPEX Coin (JPC), in proportion to shareholder dividends.</p><p>However, controversy has arisen as some users claim their assets were converted without their agreement or prior knowledge.</p><p>Users also reported an inability to withdraw their assets following JPEX's announcement of the plan.</p><p>One user, who requested anonymity, <a href="https://www.scmp.com/news/hong-kong/law-and-crime/article/3236716/hong-kong-jpex-crypto-scandal-dividends-plan-defiant-platform-prevents-users-withdrawing-assets">told</a> the South China Morning Post on Wednesday that her assets had been converted to JPC, a token with low liquidity and limited use cases, rendering her assets nearly worthless.</p><h2 id="unclear-if-users-voted-in-favor">Unclear if users voted in favor</h2><p>According to Cointelegraph, it remains unclear if the users quoted in the report had voted in favor of the plan.</p><p>Some users have alleged they were forced to accept the program, as there was no option to vote against it through the app.</p><p>JPEX's dividend plan comes amidst legal troubles for the exchange, with <a href="https://cryptonews.com/news/hong-kong-macao-police-nab-four-more-suspects-jpex-crypto-platform-scam.htm">Hong Kong authorities arresting multiple individuals</a> connected to the platform.</p><p>The exchange is accused of operating an unauthorized crypto platform and defrauding thousands of people of millions of Hong Kong dollars.</p>
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Controversy Surrounds JPEX's Asset Lock-Up Program Amid DAO Transition

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