Fraud Related to OKEx Founder Surfaces while Confusion over Detention Continues

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Fraud Related to OKEx Founder Surfaces while Confusion over Detention Continues

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As per the recent news the crypto investigation team of Shanghai Police has held OKEx and OKCoin founder and owner Star Xu in suspicion of committing fraud against investors via a potentially fraudulent cryptocurrency project. Last one month has not been the best for the Chinese Crypto industry. Chinese Authorities have been going strong with the clampdown on Cryptos trying to protect its citizens and investors from frauds and unnecessary losses.

OKEx Star Xu released for lack of evidence but still under the radar

Star Xu is a renowned personality in the Chinese and Asian Crypto Circuits. He is the founder of the two popular and probably the worlds second largest cryptocurrency exchange by trading volume, OKEx, and OKCoin based in Hong Kong and China. Although the arrest hasn’t been in connection to exchanges for a cryptocurrency project Xu is involved in, called WFee Coin. Xu was a shareholder in the project, which describes themselves as being “the world’s first WiFi sharing eco-system based on blockchain technology designed for the globe,” with a goal of solving “security, trust, sharing willingness and privacy issues accrued from WiFi sharing.”

The controversy arose regarding the WFee coin was due to multiple investor complaints to Shanghai authorities regarding the issuance of the tokens and the purpose of the fundraising effort, which many investors claimed was fraudulent with the goal of enriching the founding team, rather than developing a practical product.

Although Xu has been released from custody after questioning, due to a lack of evidence connecting him to a potentially fraudulent cryptocurrency project taking place in Shanghai’s jurisdiction, it is also believed that the Shanghai authorities are handing over all the evidence to authorities in Bejing. It is unclear at this time whether or not the Beijing authorities will take any actions against Xu.

Also, read: Nasdaq takes yet another Crypto Step, Now Adding Tools to Predict Crypto Prices

OKEx denies arrest but Chinese sources confirm

Although a popular technology mouthpiece Sina Technology Website, confirms the arrests of Star Xu,

 

A couple of people close to the OKEx team have denied the arrest news claiming it as “fake news “. Tim Byun, OK Group’s chief risk officer and head of government relations, told media that reports of Xu’s arrest constitute “fake news” and that Xu, in fact, was seeking assistance from police. According to Heslin Kim, a cryptocurrency researcher based in South Korea who uses the twitter handle named “Korean Cryptocurrency & Blockchain newS, the OKEx team has denied the arrest of Xu, stating that the event had not happened.

 

The OKEx hasn’t yet made an official announcement yet and hence Kim’s statement looks like a face-saving measure. Even Joseph Young has commented on Heslin Kim’s post and had questioned Heslin Kim asking

“What do you mean by the fake news? the report claims he wasn’t arrested but investigated.”

 

Whether detention or not, One thing is sure that the Chinese authorities are pretty serious of “cleansing” the crypto industry in the country. Chinese authorities had last month prohibited crypto companies from all commercial events related to cryptocurrencies. The had also closed various Wechat groups promoting cryptocurrencies. It had also blocked its controlled state-run internet from accessing more than 124 overseas crypto exchanges that are offering trading services to Chinese residents.    

In a way this clampdown clears fraud from the industry, Chinese authorities seem to be completely weeding out possibilities of cryptocurrency survival in the country. Its only time will tell whether the country is actually serious about the cryptocurrency industry in the country or all this Excercise is an attempt to close down doors for it.

Is China really serious for cryptocurrency industry in the country or all the enthusiasm it showed at the start of the year was just a mask? Do let us know your views on the same.

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OKEx Founder Detained as Chinese Crypto Clampdown Intensifies
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OKEx Founder Detained as Chinese Crypto Clampdown Intensifies
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Team of Shanghai Police has held OKEx and OKCoin founder and owner Star Xu in suspicion of committing fraud against investors via a potentially fraudulent cryptocurrency project.
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Nilesh Maurya 401 Articles

Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies.

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