ICO Scammers in China May Face ‘Decades in Prison’, Police Investigates EtherDelta

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ICO Scammers in China May Face ‘Decades in Prison’, Police Investigates EtherDelta

Reportedly, Chinese investors in EtherDelta have been accused of “a major scam.’ EtherDelta was a crypto trading platform founded by Zachary Coburn in July 2016. The platforms allow the trading of Ethereum and ERC-20 tokens. Notably, the launch of the exchange happened during the period when ICOs and ERC-20 tokens were creating a lot of hysteria.

Coburn charged with operating an unregistered securities exchange

Coburn was charged by the SEC in the US for operating an unregistered securities exchange. Reportedly, he paid $300,000 in disgorgement, $13,000 in pre-judgement interest and a $75,000 penalty; summing up to about $400,000.

ether delta
Transfer Documents of EtherDelta Ownership

Reportedly, Zach sold the platform to a group of Chinese investors. The new owners of EtherDelta issued a new Exchange backed token – $EDT, which later turned out to be an exit scam. Dovey Wan, a crypto-analyst with Chinese origins 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.”

The Exchange platform was based on a ‘smart contract’ designed for trading of cryptocurrencies on the Ethereum platform. After the sale of the platform, the owners issued a new token on it and marketed its utility. However, as Wan mentioned,

Apparently these folks have NO ACTUAL money for the transaction but use EtherDelta as a front to issue their own ICO for payout

The investors of EDT token have accused the beneficiaries of EtherDelta, and the police have responded with an investigation and a warrant. Dovey Wan, also stressed on the strict laws against capital scammers.  She tweeted,

“FYI Chinese police shows no mercy if any crypto scam involved large amount of retail capital”

The case filed in September 2018 is seeing an aggressive investigation by the Chinese police. She also related a previous instance of PlusToken where the creators were arrested outside of China and now face decades in prison.

Furthermore, the EtherDelta platform is still operational, while the owners face strict legal action.

Will this mark the end of unregulated Exchanges and ICOs like EtherDelta all over the world? Please share your views with us. 

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ICO Scammers in China May Face 'Decades in Prison', Police Investigates EtherDetla
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ICO Scammers in China May Face 'Decades in Prison', Police Investigates EtherDetla
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Reportedly, Chinese investors in EtherDelta have been accused of "a major scam.' EtherDelta was a crypto trading platform founded by Zachary Coburn in July 2016. It trades in Ethereum and ERC-20 tokens on the Exchange. Notably, this also coincided with the period when ICOs and ERC-20 tokens were creating a lot of hysteria. 
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Author: Nivesh Rustgi

Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com

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Nivesh Rustgi 638 Articles

Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com

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