Ace Exchange founder David Pan and six other individuals were indicted by a Taiwanese court on April 8 on charges of money laundering and crypto fraud involving digital assets valued at NT$ 340 million New Taiwan dollars ($10.7 million.)
The court ruled that the defendant’s property and other owned assets worth $110K be confiscated.
Ace Exchange Founder Defrauded 162 Individuals
As detailed in an official statement from Taiwanese prosecutors, David Pan defrauded at least 162 individuals by offering a fraudulent product built on over-the-counter (OTC) exchanges and faux investment platforms.
Investigators said the Ace Exchange founder created an offshore trading platform that offered a cryptocurrency wallet service dubbed “Alfred Wallet,” which was used to lure unsuspecting victims for the storage of their funds. However, once the funds were deposited, the investor lost access to the funds.
UPDATE: ACE EXCHANGE FOUNDER CHARGED FOR ALLEGED MONEY LAUNDERING AND FRAUD INVOLVING ASSETS WORTH AT LEAST $10.7M
— BSCN Headlines (@BSCNheadlines) April 10, 2024
The victims only realized they had been scammed when their crypto withdrawals failed. Others were locked out of the wallet after making a deposit.
Ace Exchange responded to the indictment by releasing a statement distancing itself from Pan. The exchange also disclosed that the wallet service involved in the money laundering case was not a product of Ace. Instead, it was developed by a third-party team hired by Pan.
The exchange said,
“Please rest assured. The trading and operational status of ACE Exchange is completely normal. We guarantee the security of user assets. All services for depositing and withdrawing cryptocurrencies and New Taiwan dollars are operating smoothly.”
各位可能有看到新聞了。 ACE 在這邊澄清該行為是代幣項目方行為，跟交易所營運沒關聯。目前營運都正常，如有遇到提幣問題 可以透過我們官方渠道詢問
【ACE王牌法幣加密貨幣交易所聲明稿】https://t.co/VnoekKpWL2
— ACE Exchange (@ACE_exchange) January 4, 2024
The trading platform added that Pan was a former executive who was no longer involved in the daily operations of the exchange since 2022.
Taiwan Faces Crypto Fraud & Money Laundering Headache
Once a thriving crypto hub, Taiwan is now facing a spike in cryptocurrency fraud and money laundering cases.
According to a report by Liberty Times, Pan and a collaborator named Lin were accused of orchestrating a cryptocurrency fraud scheme using deceptive social media ads to lure investors into worthless cryptocurrencies like MOCT.
During a police raid on Lin’s residence in Taipei City, authorities seized NT$111.52 million ($3.6 million) in cash and over NT$100 million in cryptocurrencies. This discovery led to the delisting of the MOCT-TWD trading pair on the Ace Exchange in January 2024.
Bitgin, a Taiwanese crypto exchange, faces police investigation over alleged money laundering. COO Yuting Zhang reportedly arrested for involvement in a $9.28 million laundering case. Despite the probe, the exchange assures normal operations and no user impact…
— BitcoinWorld Media (@ItsBitcoinWorld) November 14, 2023
In another incident, Yuting Zhang, the COO of Taiwanese exchange Bitgin, was arrested in November 2023 for alleged involvement in “Eighty-Eight Guild Hall,” a massive money laundering network. The exchange was also probed by the country’s police force.
In a separate case, a 42-year-old man named Chuang was arrested for fraud and money laundering using Bitcoin ATMs, which he imported into Taiwan without reporting to the Financial Supervisory Commission (FSC) as required by law.
While Taiwan’s crypto community recorded growth during the 2021 and 2022 bull markets, the impact of incidents like FTX’s collapse has been keenly felt by many Taiwanese investors who lost their savings.
Many victims found that they had nowhere to turn for compensation or legal recourse, thus exploring the criminal routes to attain lost funds. This resulted in the Taiwanese authorities implementing regulations to protect crypto investors in the country.
The Financial Supervisory Commission (FSC) of Taiwan has also announced plans to introduce new digital asset regulations for the country in September 2024.
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