Embattled crypto change JPEX has pushed forward with a plan that can purportedly transition the platform right into a decentralized autonomous group (DAO) and convert consumer property to dividend shares with an incentive to lock them up for 2 years.

An Oct. 4 announcement from JPEX mentioned voting for its “DAO Shareholder Dividend Scheme” was accomplished on Sept. 28, claiming that 68% of customers voted in favor for the scheme.

The scheme involves letting customers convert their at the moment frozen property to DAO Stakeholder dividends at a 1:1 ratio, with JPEX providing a repurchase possibility at 30% of the conversion value after a 12 months and a 100% repurchase after two years. 

In an earlier announcement, JPEX mentioned customers who agreed to the scheme will obtain dividends from JPEX by new token itemizing and buying and selling charges and would obtain a distribution of JPEX Coin (JPC) — the change’s native token — in proportion to shareholder dividends.

The scheme seems to be an incentive for customers to maintain their funds on the embattled change, which has been experiencing liquidity points. 

Nonetheless, a JPEX consumer — who was given anonymity — instructed the South China Morning Put up in an Oct. 4 report claims her property had been transformed seemingly with out her settlement or prior information.

She claims that she and different customers discovered they may not withdraw their property following JPEX’s announcement to proceed with the plan.

The Hong Kong police and town’s Securities and Futures Fee have shaped a joint job drive to crack down on unlawful crypto change actions. In the meantime, the JPEX scandal continues to unfold. https://t.co/lOBRNlLs7m

— Cointelegraph (@Cointelegraph) October 5, 2023

“All of my [Tether] USDT and different cryptocurrencies are gone,” the individual mentioned. She claimed her property had been transformed to JPC — a low liquidity token with few use instances.

“Another customers holding the tokens and different property have additionally discovered them transferred,” the consumer mentioned. “Given the unknown value and the impossibility of withdrawal, our property have now develop into simply waste paper.”

It’s not recognized if the folks quoted within the report voted in favor of the plan however some JPEX customers beforehand instructed the SCMP they’d been pressured to simply accept the plan as there was no choice to vote in opposition to it on its app.

JPEX didn’t instantly reply to Cointelegraph’s request for remark.

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JPEX’s dividend plan comes amid Hong Kong police arresting multiple people in reference to the change because it’s accused of operating an unauthorized crypto platform by the area’s securities watchdog.

Hong Kong police say the Dubai-based change defrauded a minimum of 2,300 folks of $178 million (1.4 billion Hong Kong {dollars}).

Earlier on Oct. 4, the area’s police and securities regulator launched a crypto-focused task force aiming to fight illicit actions by crypto exchanges.

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