The Shanghai police detained the founder of the OKCoin exchanges and OKEx Star Xu, presumably in connection with the investigation of cryptocurrency fraud. This is reported by the local newspaper Sina News.
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
Law enforcement agencies of Shanghai received complaints from investors on the WFEE crypto-currency company, of which Star Xu is a participant. Police detained the founder of the Chinese exchanges for interrogation in the investigation of this case.
Sina News reports that if the police do not file charges against Stary Xiu for participation in the fraudulent scheme, he will be released within 24 hours.
But today Star Xu was discharged. He is supposed to help the investigation of investors' complaints about the cryptocurrency company WFEE. This is reported by CoinDesk with reference to local publications.
As far as I know, Star called the police for help when he was surrounded by a group of people in Shanghai. The police arrived on the scene and invited all of them to the police station.
Andy Cheung at Twitter
The police brought everyone to the station to clarify the circumstances, and then released the founder of OKCoin and OKEx without charge. Andy Cheung also noted that Star Xu at the moment has nothing to do with OKEx.
It is noteworthy that on the same day several OKEx clients applied to the Shanghai Police Department. They reported that on September 5, during the fall of the price of the first cryptocurrency, their BTC futures positions on the exchange were forcibly liquidated.
Due to a bug on the platform, which users were not warned about, investors could not close positions on their own, which led to financial losses. At the same time, the press secretary of OKEx reported to CoinDesk that the company was not aware of the problematic incident.
Shortly after, in Twitter-account of the venture fund OK Blockchain Capital (OKBC) and partner of OKEx published a series of tweets that shed light on the situation. In particular, the fund denied any connection between Stuart Xue and WFEE.
OK Blockchain Capital Twitter
It is known that OKBC together with a group of venture investors acquired a start-up WFEE. However, soon WFEE changed the original white paper, which OKBC representatives were not notified about.
OK Blockchain Capital stated that at the moment it does not participate in the WFEE project and is not responsible for the results of the company's activities.
In another tweet, OKBC reported that last month OKEx conducted delisting of the WFEE token and warned users about possible risks associated with the company.
The case of WFEE was sent to the Beijing Police Department.