Taiwan Charged 32 People In $24M Crypto Fraud Linked to ACE Exchange

Taiwanese authorities charged 32 individuals with fraud and money laundering linked to the crypto trading platform Ace Exchange. According to a local news report, the Taipei District Prosecutors’ Office indicted 32 people, including Ace Exchange founder David Pan, his business partner, Lin Keng-hong, and former chairman Wang Chen-huan.

According to the report, in 2019, the suspects promoted investments in bitnature coins, mochange (an Ace Exchange token), NFTC tokens, and other tokens. They also created fake white papers and marketing documents to make their scheme appear legitimate. In addition to promoting tokens, Lin and Pan allegedly promised to turn ACE Exchange into Asia’s most comprehensive blockchain ecosystem for crypto trading.

However, many investors saw a significant decline in token values. They were unable to convert them back to New Taiwan dollars as guaranteed, so they reportedly filed complaints, which triggered a judicial investigation. Over 1,200 people lost 800 million New Taiwan dollars ($24.56 million) in this fraud.

Authorities Suggest 20-Year Sentences for Key Figures of Exchange

According to prosecutors, the suspects executed a two-pronged scheme to deceive people. First, they advertised tokens on many media platforms while manipulating their exchange prices to create an illusion. After selling these tokens and other blockchain products for a total exceeding NT$2.2b, prosecutors claim the suspects instructed others to hide the money across various locations, including a real estate purchase in Yilan County.

Prosecutors further said Wang attempted to manipulate the market by putting NT$26m ($791k) back into the exchange to inflate token prices. Wang, while implicated in the scheme, received around NT$43m ($1.3m). Because of the serious fraud and the many victims involved, prosecutors suggested that the main suspects, including Pan and Lin, should get at least 20 years in prison. For Wang, they suggested a minimum of 12 years behind bars.

CoinMarketCap data shows that the Ace was launched in late 2018 and trades approximately $14 million per day. According to Traders Union, Ace Exchange is labeled as a “high-risk cryptocurrency exchange” with a trust score of 2.78 out of 10.

Earlier this month, authorities also charged Pan and six others for crypto fraud worth $10.7m. In this case, investigators found that Pan set up a crypto wallet named “Alfred Wallet.” This service allegedly attracted unsuspecting victims to deposit their funds.