OKCoin Founder Was Detained in China Amid Fraud Allegations

OKCoin Founder Was Detained in China Amid Fraud Allegations

The founding father of the second largest cyber-money bourse on the planet OKCoin was reportedly detained on the occasion of suspected crypto-scam. According to the information of local media outlets, the OKCoin’s «constitutor» Star Xu appeared in the hands of law enforcement in China.

Alleged Fraudulent Performances And Consequent Detention

On September 11, Sina News reported that Xu was allegedly detained by police in the Chinese city of Shanghai. The site also added that the trading venue’s founder would be freed in the span of 24 hours unless sufficient proof of his involvement is provided. 

Another news outlet ZeroHedge points out that the reason for the detention was the complaint of WFEE Coin investors, where Xu held some shares in this entity. They notified law enforcement about the alleged scamming performances carried out in the company and urging the police to interrogate the founder. 

As per the report, WFEE emitted tokens and vended them via the company’s online platform. Thus, as long as XU is the business’s shareholder, he can be held accountable for any scamming practices related to the entity. 

ZeroHedge goes on to specify that the probe outwardly demonstrated that OKCoin had nothing to do with emitting WFEE Coin. The media also noted that it would not make much sense for the company to dupe investors via Beijing branch.

Background

The information regarding Xu’s alleged detention came following the considerable soaring of OKEx volumes this summer. For instance, two months ago OKEx, a crypto-trading venue founded by Xu too, saw a novel record of $5.7 billion in volume. This was a huge spring when compared with June’s $2.9 billion.

It was reported that amidst Xu’s detention news, the exchange’s trading volume decreased by 3% over a day.