Alleged Scandal Involving OKEx Crypto Exchange Founder Sees Release From Police
OKEx Founder Released From Police Questioning. Denies Fraud Charges
Star Xu, the founder of OKEx, one of the largest crypto exchanges in the world, affirmed that the allegations that he was guilty of fraud were fake after the Chinese law enforcement summoned him to a police station for 24 hours this week.
Multiple local media outlets have affirmed that Xu, which is also the CEO of the crypto exchange, had faced some problems at his hotel when a group of “investors” linked to the WFEE Coin (a wifi sharing project made on the blockchain) said that he had shares. Illicit activity from WFEE has led these people to seek justice and they alerted the Shanghai police, which brought Xu in for questioning.
According to a photograph of the police report, the institution was notified at 17:59 on September 10. Some other sources affirm that the investors’ dissatisfaction was actually linked to OKEx itself and that the problems were caused by crashes in the system.
While nothing is certain yet, Cointelegraph, which also reported on this story has used its own Chinese sources to affirm that the true version of the story is the second one and that the WFEE connection was fake. OKEx denies that Xu has any involvement whatsoever with the WFEE including no equity relationship with the company.
Andy Cheung, COO of OKEx, has affirmed that even though WFEE has acquired OK Blockchain Capital and other companies, any white paper changes in the company have not been notified to OKBC. Blockchain Capital has affirmed that Xu is not a shareholder of WFEE.
Some local news outlets have reported that seven out of three hundred investors who had suffered losses on OKEx had reached a form of settlement. Xu went to the police and explained the whole situation, denying the fraud allegations.
After the police arrived at the hotel, they talked to Xu and the investors and took them to the police station to gather their testimonies. Xu described his interview as “normal” and stated that citizens are in their right to make such allegations. He only fulfilled his “duty” and cooperated with the police to clarify the whole situation as soon as possible.
One of the particular points that Xu talked about to the police was about the losses that occurred because of the system crashes in OKEx. According to reports, the losses were as high a 300 million yuan after the failures on September 5. The platform went offline and left investors without the possibility to trade or salvage their positions, which caused heavy losses.
Xu explained that these abnormalities that the platform offers leveraged trading, which is a neutral tool and that only investors with professional knowledge should be able to manage the risks involved in using this type of trading. He has also stated that OKEx is a Malta company and that he is not a shareholder or a director in the company.
OKEx offers for its investors the opportunity to add as much as 20x leverage to their contracts and operates without regulatory oversight.