Chinese Police Investigating EtherDelta Over Exit Scam

Chinese police have reportedly initiated an investigation against crypto trading platform EtherDelta for its involvement in an exit scam.
Revealed by Dovey Wan, the founding partner at blockchain-focused investment firm Primitive Ventures, the non-custodial trading platform was sold by its founder Zack Coburn to a group of Chinese “who later issued exchange token $EDT and [which] turned out to be an exit scam.”

JUSTIN and 🤦🏻‍♀️🤦🏻‍♀️🤦🏻‍♀️

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

— Dovey Wan 🗝 🦖 (@DoveyWan)

The law enforcement was apparently informed by the “furious investors” of the token.
Wan also shared a snapshot of the ownership agreement signed between Coburn and the Chinese buyers. She also alleged that the new owners of the exchange bought it with an intention to use it as a “front” to issue their initial coin offering (ICO).

This is the stock ownership agreement between the Chinese buyers and Zack, obtained by the Police 👀👀👀 Now we know who the mysterious buyers are

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

— Dovey Wan 🗝 🦖 (@DoveyWan)

EtherDelta is one of the in the crypto market. Built on Etherum blockchain, it allowed the listing of any ERC-20 tokens. It allows users to trade cryptocurrency – in fact, people do not need to sign up at all.
A gentle slap by the SEC?
Last year, the US Securities and Exchange Commission (SEC) charged the founder of the decentralized exchange for operating an unregistered securities exchange. Coburn was eventually in disgorgement, with another $13,000 in pre-judgment interest and a $75,000 penalty.
Wan pointed out that, unlike the US where Coburn got away with only a fine, “Chinese police shows no mercy if any crypto scam involved large amount of retail capital.”

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