The Chinese police are now investigating EtherDelta after the crypto trading platform’s involvement in a major scam. In November, last year U.S. Security and Exchange Commission charged founder of EtherDelta, Zachary Coburn for operating as an unregistered national securities exchange.
Today Dovey Wan who is a partner at cryptocurrency investment fund Primitive Ventures, tweeted about the scam. It was reported that Coburn sold the company to a group of Chinese buyers in 2017 who issued a token EDT which turned out to be an exit scam. People who invested in EDT complained to the Chinese authorities, and now the action is being taken.
Last time when EtherDelta was involved in the scam, Coburn had to pay $388,000 in disgorgement and penalty. It is not reported yet how much the fraud is worth. Dovey also shared the photo of a letter from the Changzhou Public Security Bureau saying the investigation has begun.
China in the past has taken some serious actions against the crypto trading companies who have involved in major scams. It is not clear yet how big the fraud is or how much money is involved. But it is being speculated that U.S. authorities may also get involved in the investigation because of the company’s past operations.