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Trading  | September 11, 2018

The founder of cryptocurrency exchanges OKex and OKCoin, Star Xu, has been arrested by Shanghai police officials, China’s Sina News reported.

Xu was allegedly involved in a fraudulent scheme regarding WFEE Coin. As Xu is a shareholder in this potentially fraudulent company, he was “put through a round of questioning to get to the bottom of these rumors.”

According to Nulltx, in the case of WFEE, the company issued native tokens which were sold through the website. According to the Shanghai police, various complaints were een received regarding this venture being potentially fraudulent and the authorities are officially investigating the matter at this time.

One person of interest regarding WFEE is Star Xu. Cryptocurrency enthusiasts know him as the founder of crypto exchanges OKEx and OKCoin, ranked the second-largest exchange in the world by traded value among fee-charging venues tracked by Coinmarketcap.com.

As a shareholder of WFEE, Xu can be deemed responsible for any fraudulent efforts regarding this investment scheme. However, the investigation has shown Xu’s company in Shanghai is not responsible for issuing the currency. Instead, that part of the business was handled in Beijing.

The WFEE team’s exact location seems to be in Shanghai. As such, it makes little sense for them to defraud investors through a Beijing subsidiary. The exact nature of Star Xu’s involvement remains unclear at this time. He is expected to be either released or remain in custody after the initial 24-hour period expires in a few hours.

News of the arrest has led to new ripples among the cryptocurrency world, where given the recent “volatile” market conditions, a shakeup like this is the last thing cryptocurrency needs, and sure enough, cryptos slumped on the news.


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