The founder and CEO of OKCoin, an exchange service, and OKEx, the second biggest crypto exchange, Star Xu has reportedly been brought in for questioning in respect to suspicions of crypto fraud.
Allegedly, Xu is detained at the moment in the police station of Shanghai Weifang Xincun and is expected to be let out within the next 24 hours, if no evidence backing up the suspicions come to light.
It was being reported that the investors of WFEE Coin, a company where XU is a shareholder, made official complaints regarding alleged illegal practices, which was the reason for the detainment and questioning of Star Xu.
A tweet by cnLedger stated:
Sina News: Star Xu, founder of OKCoin/OKEX, is being investigated by Shanghai police. According to Lu Jun, officer at the local PD, Xu was suspected of fraud accused by investors. SH police has accepted the case.
— cnLedger [Not giving away ETH] (@cnLedger) September 11, 2018
Source (in CN): https://t.co/Y6fIt8Sz49https://t.co/ItVfMZ8ZoD pic.twitter.com/Gquv9n7iKs
Xu’s exchange is based in Malta although it’s for the Chinese and their market, however, in China, there is currently a ban on all crypto activity including exchanges.
WHY IS THIS IMPORTANT?
- OKEx is the second largest crypto exchange with a daily trading volume of over $700 million, and if any allegations turn out true about their CEO this could impact firstly the exchange, and secondly the market.
- China is a controversial place for a crypto exchange to operate in since they have banned digital currencies and ICOs, however, they are quite happy to implement and develop blockchian technology. The Malta-based OKEx exchange is deep in the Chinese crypto market bypassing the existing laws, which is convenient for the local crypto users.