Platform users were asked to vote on the “DAO Stakeholders Dividend Plan” which promised new customers a chance to invest in a dividend-paying asset, with a potential buyout price of twice the original value after two years.
A victim told the Post on Friday that investors were not able to vote against the scheme on the platform’s mobile app. The plan was first revealed by the unlicensed trader on Wednesday, while police announced that the claims involved in the alleged fraud had snowballed to HK$1.37 billion (US$175 million) in the largest case of its kind in Hong Kong’s history.
“It’s really dodgy,” said the victim, who spoke on the condition of anonymity. “There were two buttons – ‘agree’ or ‘not accept’ – for the plan. But after pressing ‘not accept’, there was another ‘agree’ button, forcing you to accept the plan.
“You don’t have a choice to reject the plan. There is certainly a problem here.”
Eleven people have been arrested in connection with the case, including influencers Joseph Lam Chok, 33, and Chan Wing-yee, 36. Lam is expected to explain details about the alleged fraud at a press conference on Friday afternoon.
JPEX has remained defiant and vowed to continue operating despite an ongoing police investigation.
It gave investors a week from Thursday evening to vote on the DAO plan which pledged to distribute 49 per cent of the stakeholder dividends, with a total value of US$400 million.
According to JPEX, the plan would allow investors to convert their funds into DAO stakeholder dividends, with a repurchase ratio of one-to-one after two years.
DAO stands for decentralised autonomous organisation, which is defined as an entity in which members collectively make decisions. JPEX is run by an anonymous DAO, according to the company’s website.
As of Friday 8am, 71 per cent of voters agreed with the plan, and 29 per cent rejected it, according to a screencap of the mobile app seen by the Post.
A technology risk expert earlier said the plan was “very suspicious” because it essentially asked users to become equity owners rather than paying back the assets they owned.
Accountancy sector lawmaker Edmund Wong Chun-sek urged people to think carefully before investing in any products.
“Now with the [scandal], I think everyone needs to think carefully over this plan and whether to trust this service provider,” Wong said on a radio programme on Friday.
While the scheme offered investors a repurchase at 100 per cent of the conversion price two years later, Wong warned that there was no guarantee.
“Higher risk comes with higher returns. But with problems emerging with the service or assets of JPEX, I think investors should know what to do,” he said.