The beleaguered JPEX crypto exchange is in hot water as it faces over 80 complaints filed with the Hong Kong police, according to a report by the South China Morning Post on September 16. These complaints collectively involve cryptocurrencies valued at approximately $4.3 million.

Raymond Siu Chak-yee, the commissioner of police, disclosed that the Hong Kong Securities and Futures Commission (SFC) had officially reported the matter to the police just two days prior. The police's commercial crime bureau is now actively investigating the allegations against JPEX.

The surge in complaints follows a warning issued by the SFC on September 13, stating that JPEX was operating without the necessary license. The SFC had already placed JPEX on its Alert List in July 2022 for soliciting Hong Kong investors without proper authorization.

The SFC's statement highlighted several concerns with JPEX's operations, including misleading claims and practices. One key issue was JPEX's false assertion of being "licensed" by overseas regulators to operate a cryptocurrency trading platform. The SFC clarified that these claims were not accurate.

JPEX had also claimed its headquarters were in Dubai, operating under the supervision of the Virtual Assets Regulatory Authority of Dubai (VARA). However, VARA's public list of licensed virtual assets service providers did not include JPEX, raising further doubts about its legitimacy.

Moreover, the SFC expressed concern about the exceptionally high returns JPEX offered on certain products, such as a 21% annual percentage yield for Ethereum (ETH). These returns raised suspicions as they exceeded typical market rates.

JPEX's yield-generating products, including 'Earn' and 'Savings,' were found to be in violation of Hong Kong's crypto regulatory regime.

Additionally, JPEX made misleading claims about receiving funding from a Hong Kong-listed company, prompting the SFC to call out key opinion leaders promoting the exchange with false information.

Several users reported issues with JPEX, including difficulties withdrawing assets and unexpected balance changes. In one instance, a user's withdrawal request for 1,000 Tether (USDT) resulted in only 25 USDT received, with the rest being withheld as a "processing fee."

JPEX responded to the SFC's allegations by accusing the agency of unfairly targeting the exchange during its "preparation phase" and considering withdrawing its license application. The exchange criticized the SFC for undermining crypto development in Hong Kong.

In recent events, JPEX employees reportedly abandoned their booth at the Token2049 event in Singapore, despite earlier claims of active participation. The exchange has also adjusted withdrawal fees for USDT and promised to increase withdrawal limits.

The situation surrounding JPEX continues to evolve, and stakeholders in the cryptocurrency industry are closely monitoring these developments amid growing concerns over the exchange's operations and regulatory compliance.