Crypto News
Chinese police begins investigations after EtherDelta allegedly pioneers another exit scam
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China has been reinventing the meaning of chaos recently, ever since its direct confrontation and trade wars with the U.S. commenced. The country is in the news again after reports China a new scam related to cryptocurrencies took Twitter by storm. Crypto-trading platform EtherDelta is at the heart of this alleged scam, a development that has called for the Chinese police’s involvement. The development was first brought to light on Twitter by Primitive Ventures’ @DoveyWan, who tweeted,
“EtherDelta is involved in a major scam in China, police officially take legal action against it The actual beneficiaries of EtherDelta are all Chinese after ownership transition in 2017 Highly recommend western media to follow up.”
Source: @DoveyWan
EtherDelta’s founder, Zachary Coburn, had sold the company to a group of Chinese individuals (as evidenced by the above photograph), who later built in-house ERC-20 token, EDT, to enable the exit scam. The police got involved only after furious investors blew the whistle to local authorities.
While Coburn’s name from the alleged scam seems to have been cleared, the ex-CEO of EtherDelta was charged by the Securities and Exchange Commission (SEC) in 2018 on the premise of “operating as an unregistered national securities exchange.” Based on the official report, EtherDelta had both the user interface and underlying functionality of an online national securities exchange and was required to register with the SEC or qualify for an exemption. The outcome was as follows,
“Without admitting or denying the findings, Coburn consented to the order and agreed to pay $300,000 in disgorgement plus $13,000 in prejudgment interest and a $75,000 penalty.”
Although no official source has confirmed the aforementioned development, the only proof regarding this matter is a letter from the Changzhou Public Security Bureau that echos the beginning of an investigation. As the plot thickens, developments may require authorities from the U.S and China to jointly investigate into EtherDelta’s past and operations.
Source: @DoveyWan
AMBCrypto is reaching out to official Chinese sources to get confirmation of the same.
