OKEx founder Star Xu has been arrested in Shanghai after being accused of fraud by investors. The fraud is specifically related to actions regarding the WFEE token. Tweet this

Star Xu, CEO and founder of OKEx, the world’s second largest crypto exchange by volume, has been arrested in Shanghai after being accused of fraud by investors.

The specific complaint filed with authorities has to do with activity around the WFee token, which was marketed as “the world’s first WiFi sharing eco-system based on blockchain technology designed for the globe,” which Star Xu appears to be an owner of.

The token was marketed and sold through the OKEx exchange, also founded by Xu, creating a clear conflict of interest, but at this time it is unclear exactly how he is involved.

CnLedger has the scoop in a Tweet:

Preliminary investigation by Shanghai police shows that Xu's company in Shanghai is not related to digital currency. The alleged fraud was not conducted in Shanghai but in Beijing, therefore documents will be handed to Beijing police. — cnLedger [Not giving away ETH] (@cnLedger) September 11, 2018

According to reports, the case is expected to be moved to Beijing, which was the location of the fraud.

Authorities say Xu will either be released after 24 hours or could potentially remain in custody until further investigation is complete.

Given the growing number of schemes in the cryptocurrency world today, this action proves that even the largest players in crypto may be responsible for fraud, and is causing some serious anxiety in the cryptosphere.