Crypto exchange EtherDelta is being investigated for a $175,000 'exit scam' in China
Thu, 08 Aug 2019, 03:47 am UTC
Chinese authorities are allegedly investigating claims that non-custodial crypto exchange EtherDelta conducted a $176,000 exit scam after the company was sold to anonymous Chinese investors in December 2017, according to Dovey Wan, founding partner of blockchain-based investment company Primitive Ventures.
In a series of tweets, Wan said that the alleged scam involved the sale of native exchange asset EtherDelta Token (EDT). She said that the exchange’s founder Zack Coburn sold EtherDelta to Jun Chen and colleagues, who later issued exchange token EDT and it turned out to be an “exit scam.”
“Apparently these folks have no actual money for the transaction but use EtherDelta as a front to issue their own ICO for payout,” she stated.
JUSTIN and ????????♀️????????♀️????????♀️— Dovey Wan ???? ???? (@DoveyWan) August 7, 2019
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 @coindesk @Cointelegraph pic.twitter.com/eGPm8wor8k
The angry EDT investors whistleblowed to local authorities, and the case is now “taking into official investigation process.” Wan further warned that “Chinese police shows no mercy if any crypto scam involved large amount of retail capital.”
This is not the first time EtherDelta has been involved in legal issues. Last year, the U.S. Securities and Exchange Commission (SEC) charged Coburn for running an unregistered securities exchange. The founder consented to cooperate and paid the state $300,000 in illegal profits, $13,000 in prejudgement interest, and $75,000 penalty.
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