Altcoin News: EtherDelta Accused of Fraud

August 7, 2019, by Marko Vidrih on ALTCOIN MAGAZINE

Chinese police are investigating the operation of the EtherDelta cryptocurrency platform on suspicion of organizing a fraudulent scheme.

Earlier, the US Securities and Exchange Commission (SEC) accused the founder of the EtherDelta platform Zachary Coburn in illegal trading in securities.

Now, according to Dovey Wan, partner of Primitive Ventures Investment Cryptocurrency Fund, the Chinese police also drew attention to the company’s activities:

“EtherDelta is involved in a major scam in China, police officially take legal action against it,” tweeted Dovey Wan.

Wan also said that Coburn sold EtherDelta to a group of Chinese buyers who later issued an EDT exchange token, and this scheme turned out to be fraudulent. Apparently, angry investors turned to the police.

Last November, the SEC accused Coburn of managing an unregistered crypto exchange. At that time, the regulator said:

“Almost all of the orders placed through EtherDelta’s platform were traded after the Commission issued its 2017 DAO Report, which concluded that certain digital assets, such as DAO tokens, were securities and that platforms that offered trading of these digital asset securities would be subject to the SEC’s requirement that exchanges register or operate pursuant to an exemption.”

Then Coburn settled the case with the SEC, not recognizing or denying the allegations. Wan concluded that the Chinese police will act “mercilessly” if cryptocurrency fraud is associated with large retail sales.

Author: Marko Vidrih