The virtual currency fraud case involving the founder and former CEO of ACE Exchange, a leading trading platform, officially concluded on the 26th.
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Taichung District Prosecutors’ Office indicted the founder of ACE Exchange on suspicion of fraud, with the amount involved in the cryptocurrency trading exceeding 300 million yuan.
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Ace Exchange Case: 32 People Indicted, Facing 20 Years in Prison
Direct Sales of Worthless Coins
Wang Chen-huan Hid Fugitives and Guided Cryptocurrency Development
Lin Keng-hung Led Money Laundering and Concealed Financial Flows
Over 1,200 Victims, Losses Close to 800 Million NT Dollars
Operators’ Self-Regulation Proves Ineffective
Ace Exchange Case: 32 People Indicted, Facing 20 Years in Prison
According to the press release from the Taipei District Prosecutors’ Office, after conducting three large-scale searches, the prosecutors found that the entire case was led by a habitual fraudster named Lin Keng-hung. Lin first approached ACE Exchange founder Pan Yi-zhang, and then collaborated with lawyer Wang Chen-huan to carry out fraud and money laundering, resulting in a gain of over 2.2 billion NT dollars.
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Furthermore, the scale of money laundering assistance provided to the fraud ring exceeded 2 billion NT dollars. After investigating, the Taipei District Prosecutors’ Office indicted all 32 suspects on the 26th, seeking 20-year prison terms for core members Pan Yi-zhang, Lin Keng-hung, Chen Jin-yang, and Lin Ruo-qiao.
Wang Chen-huan, on the other hand, is facing a sentence of 12 years or more.
Taipei District Prosecutors’ Office Announcement
Direct Sales of Worthless Coins
The Taipei District Prosecutors’ Office pointed out that tokens including MOCT, CSO, FITC, NFTC, and BNAT had no practical application prospects, but under the division of labor among the core members, they fraudulently obtained nearly 800 million NT dollars:
Writing white papers for virtual currencies with false information.
Listing them on ACE and ProEx exchanges.
Establishing the IMBA direct sales team for promotion.
Manipulating the coin prices on the exchanges.
Wang Chen-huan Hid Fugitives and Guided Cryptocurrency Development
Wang Chen-huan knowingly provided a house located on Zhongzheng Road in Xindian District, New Taipei City, to Lin Keng-hung, a fugitive from a previous case, for hiding from authorities in June 2023.
Despite knowing that worthless coins like MOCT had no actual value, Wang Chen-huan, in June 2023, took on the role of “strategist” and taught Lin Keng-hung and others to modify the content of the white papers, presenting false information in the modified documents to make investors believe that the development team actually existed.
Lin Keng-hung Led Money Laundering and Concealed Financial Flows
Under the guidance of Lin Keng-hung, his subordinates engaged in money laundering activities:
Large sums of fraudulently obtained cash, ranging from several million to tens of millions NT dollars, were transported and concealed in various locations in Taipei and New Taipei City.
The illicitly gained funds were used to purchase and operate properties in Yilan and Lianchi Monastery, and also served as one of the money laundering bases.
A total of 43 million NT dollars of the illegal proceeds were handed over to Wang Chen-huan, with 26 million NT dollars used as capital increase funds for ACE Exchange.
Over 1,200 Victims, Losses Close to 800 Million NT Dollars
In this case, the prosecutors seized over 600 million NT dollars, including:
Cash totaling over 181.33 million NT dollars
20,000 RMB (equivalent to approximately 926,000 NT dollars)
248 BNB
43 BTC
1,943,602 USDT
2,300 ETH
The above-mentioned cryptocurrencies were valued at over 400 million NT dollars based on the exchange rate on April 11, 2024, along with a Mercedes-Benz sedan (already liquidated for 1.71 million NT dollars) and a McLaren sports car, among other assets.
Operators’ Self-Regulation Proves Ineffective
The prosecutors stated that at present, the regulation of virtual currencies mainly focuses on “anti-money laundering” and “guiding principles,” which do not have binding force and solely rely on operators’ self-regulation, resulting in inadequate protection for investors.
The fact that the main suspect, Wang Chen-huan, has served as the deputy convener and legal affairs officer of the VASP Association’s preparatory group further highlights the ineffectiveness of relying solely on operators’ self-regulation to play a significant role.
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Taiwan’s Financial Supervisory Commission lacks coordinated regulation. Groups of prosecutors criticize: relying on specific industry players for guidance while neglecting secondary operators and currency traders.
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ACE
Ace Exchange
Further Reading
Taichung District Prosecutors’ Office Indicts Founder of Ace Exchange for Suspected Fraud, with Cryptocurrency Trading Involving Over 300 Million NT Dollars
Cooperating Wallet Partner “Alfred Wallet” Involved in Money Laundering of 30 Billion NT Dollars, 26 Individuals Arrested