ACE Exchange Scandal: Fraudsters Unmasked in Crypto Con

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The Taipei District Prosecutor’s Office apprehended 32 culprits involved in fraud and money laundering connected to the ACE Exchange, a cryptocurrency trading platform, on Friday. 

The authorities took a proactive step to ensure crypto thrives in the country by appointing the Financial Supervisory Commission (FSC), its top financial regulator as the main body responsible for overseeing crypto activities and the growing industry in the region.

In 2023, ACE Exchange joined forces with other major exchanges in Taiwan to help introduce the framework for the digital assets platform. The Asian country took strong measures in 2022 to safeguard consumers by tightening regulations on the use of credit and debit cards for purchasing digital currencies.

Ace Exchange lured investors with irresistible incentives 

Among the fraudsters charged were ACE Exchange Founder, Dan Pan, his business associate; Lin Keng-hong, and Wang Chen-huan, a well-known lawyer who held the position of chairman at the exchange. While promoting ACE Exchange, Pan and Lin expressed their vision of transforming it into the most comprehensive blockchain ecosystem for cryptocurrency trading in Asia. 

The suspects started scheming in 2019 by persuading investors to buy tokens associated with the trading platform like NFTC tokens, bitnature coins, and other tokens. To make these investments seem legitimate, the accused individuals reportedly created white papers and other supporting materials, according to prosecutors.

Unfortunately, many investors experienced a significant decline in the value of their tokens. This was, however, disheartening to the investors as they were promised great incentives and irresistible offers. 

Investors saw through the facade 

Using various media for advertising channels, the prosecutors revealed that the suspects were able to attract many investors by engaging in price manipulation on their platform. 

Investors eventually saw the truth behind the smoke and mirrors when they were unable to convert their tokens back to New Taiwan dollars as promised. This prompted them to file complaints, seeking a judicial investigation against the suspects.

The suspects allegedly sold tokens and other blockchain products, accumulating proceeds of at least NT$2.2 billion or $67.47 million. Additionally, they instructed others to hide cash in different locations, even purchasing real estate in Yilan County.

Consequences as action came back to haunt

According to the prosecutors, it was reckoned that around 1,200 people were swindled out of approximately NT$800 million ($24.56 million). According to the local news, it was reported that around NT$43 million was transferred to Wang, who then injected NT$26 million back into the exchange to boost prices.

Based on the magnitude of the losses, the prosecutors suggested prison terms of at least 20 years for the four main suspects, including Pan and Lin. Minimum of 12 years was proposed for Wang, taking into account his position as a director of a renowned law firm and his alleged significant involvement in facilitating the scheme.

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