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Is the Hong Kong JPEX Cryptocurrency Exchange a scam? JPEX Exchange Background/Security Introduction

2023-09-22 Brokersview

JPEX Exchange has been heavily publicized recently, JPEX can be seen everywhere, but with it comes the news of JPEX scams, beware of JPEX scams, and so on. According to an announcement issued by the Hong Kong Securities and Futures Commission on September 13, JPEX Group's entities have not obtained the corresponding licenses and have not submitted applications to operate a regulated virtual asset trading platform (VATP).


Introduction to the JPEX exchange

Full name of JPEX Exchange: JP-EX Crypto Asset Platform Pty Ltd

Chinese name: Greenstone Digital Asset Platform

Founded: 2020

Number of users: As of May 2023, the number of users exceeded ; 1 million

JPEX brand spokesperson: Asian film and television superstar Zhang Zhilin, well-known Taiwanese artist Chen 0jiu

In 2022, won the "Best Staking Platform 2022"

In October 2022, JPEX attended Dubai's largest memory blockchain event "Crypto Expo Dubai" and won the "Best Staking Platform in 2022" award

In 2023, get the "Most Innovative NFT Platform"

In March 2023, the NFT trading platform "Gallery" launched by the platform won the "Most Innovative NFT Platform" award at the 2023 Crypto Expo Dubai event, becoming the first Asian platform to win this award.

JPEX background

Operating headquarters: set up in Dubai, and set up corresponding departments in different countries. JPEX (United States) is mainly a strategic consultant, JPEX (Australia) is mainly marketing, and JPEX (Canada) is mainly a development route planning

Team members: The team members are top computer technology professionals from Japan, the United States and China; The advisory team has worked for former large Wall Street hedge fund firms in the United States

The CSRC listed six major doubts

(1) JPEX states on its website that it is "a licensed and recognized digital asset and virtual currency platform". It claims on its website and in local editorial advertisements that it has obtained licenses from a number of overseas regulators to operate virtual asset trading platforms, which is actually inconsistent with the facts.

(2) JPEX offers extremely high returns for some of its products.

(3) The SFC received complaints from retail investors and noted media reports that retail investors failed to withdraw virtual assets from their accounts opened with JPEX or found that their account balances had been reduced and changed.

(4) Some of the products offered by JPEX appear to involve virtual asset arrangements, such as "deposits", "savings" or "income" of virtual assets that are not permitted under the SFC's virtual asset trading platform regulatory regime.

(5) JPEX advertised on its website and local editorial advertisements that it had entered into a business partnership with and received investment from a Hong Kong listed company, when in fact the cooperation had been terminated and the listed company had not actually made any investment.

(6) Internet celebrities and OTC money changers made false or misleading statements on social media that JPEX had independently or jointly applied for a virtual asset trading platform license in Hong Kong with a Hong Kong listed company, when in fact none of the JPEX Group entities had submitted any application for a virtual asset trading platform licence to the SFC.

After the SFC issued a statement, JPEX responded on its website, saying that it had previously announced that it was "intended" to apply for a Hong Kong license, was preparing documents, and had not yet submitted an application.

Is the JPEX exchange safe? Is it a scam?

Before starting to use an exchange, the first thing we need to worry about is its security. Although you have heard the name of JPEX exchange, you rarely know the company's data, and many netizens also have concerns about JPEX scams or JPEX scams. Therefore, the safety of JPEX will be analyzed in detail below.

1. JPEX regulatory license (it has been confirmed that the legal person is different, there are potential risks)

According to JPEX's official website, JPEX already has regulatory licenses in the United States, Australia, Canada and Lithuania. Users can obtain relevant information by searching for the registered name of the company:

Canada Fintrac MSB License:JP-EX Exchange Limited

US FinCEN MSB Financial License:JP-EX Crypto Asset Bank

Australian Trading Platform License:JP-EX Crypto Asset Platform PTY LTD

Lithuanian Virtual Asset Service Provider:JP-EX Crypto Asset Platform UAB


2. JPEX Financial Insurance Compensation Plan

JPEX announced in 2020 that due to the increasing number of hacking incidents, the platform has purchased asset insurance for users, and the maximum protection limit is 75,000USDT, as long as the user who has undergone KYC has the qualification for protection. In other words, if your funds are lost on JPEX for reasons other than your own, JPEX can pay up to 75,000 USDT per user, and this insurance emphasizes that the protection rate is 90%, which is the same as the requirements of international finance.

3. JPEX user asset security

As long as it is a qualified exchange, it is important to properly protect user assets, and multi-signature cold wallets are one of the safest ways to store cryptocurrencies.

Most of the user assets on JPEX are stored in peer-to-peer multi-signature cold wallets, which the platform believes is currently the most secure practice, and all signing acts must be signed twice by three professional auditors in the operation team in an offline state to be successful.

4. JPEX asset reserve certificate

JPEX's high interest rate is another point of interest, and some people believe that such high interest rates are likely to be "Ponzi schemes". That is, using the funds of new users to pay high interest rates of old users, there may eventually be a crash or the funding side runs away. Therefore, the controversy of JPEX scam or JPEX scam has been circulating online.

As we mentioned above, JPEX Dividend is based on JPEX Automatic Arbitrage AI (IAIA System). That is, JPEX uses the difference between different exchanges to buy low and sell high to make profits for investors. But there is still a doubt in this arbitrage system, that is, does JPEX really have that much money?

JPEX announced its PoR Asset Reserve Certificate in November 2022 and currently has 8,889 BTC as a reserve, in addition to the JPEX Foundation contains more than 100 cryptocurrencies, including $400 million worth of unlocked JPC. For more details, please refer to the JPEX Reserve Description.

However, in the announcement, we can also find that this is not a report full of details to prove that JPEX also said that it is actively communicating with auditors, just to give users a complete PoR, so that users can directly see JPEX reserve funds on the memory block chain, and believe that more transparent fund reserves can give users more confidence.