OKEx, OKCoin Founder Star Xu Taken into Custody for Fraud Investigation

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OKEx, OKCoin Founder Star Xu Taken into Custody for Fraud Investigation

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Star Xu, the founder of crypto exchange OKEx, has briefly been taken into custody by police in Shanghai, China. Allegedly, Xu is a shareholder of WFEEcoin, which is under investigation for fraud.

Xu voluntarily surrendered himself for interrogation by Chinese police, which carried on for about 24 hours. He agreed to assist in the investigation of WFEEcoin. OKEx is in the top 3 in the world by trading volume among Huobi and Binance.

China is unfavorable towards crypto trading, having banned Chinese yuan (CNY) to crypto trading in September 2017 and recently blacklisted most crypto trading websites.

According to the media report on this situation, if Chinese police find that Xu committed any criminal act, he would not be let go. Although this round of interrogations have not seen any results, the case was transferred to Beijing, the capital of China, and further interrogation is likely in Beijing. For now Xu is free as of 11 September 2018.

Aside from the WFEEcoin situation, Star Xu and the exchanges OKEx and OKCoin have encountered plenty of controversies. Recently, OKEx had to conduct a clawback after a trader leveraged a long position way too hard, resulting in losses so big that OKEx’s insurance fund was wiped out and other traders had to pay for the shortfall.

OKEx has also been accused of manipulating the market to cause a crash in April 2018, and of falsifying trading volume by 90%, allegations that caused OKEx’s CEO to resign. Additionally, OKCoin was sued for slowing down Bitcoin Cash withdrawals right after the fork that created Bitcoin Cash, causing big losses for traders.

 

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