Chinese Authorities Questions Star Xu, OKEx Founder Over Fraud Allegatiosns

by | Sep 12, 2018 | Cryptocurrency, Cryptocurrency News

Star Xu |Bitcoin fraud | Fraud allegations | OKEx Founder

Star Xu, the founder of the cryptocurrency exchanges of OKEx and OKCoin, was subsequently arrested and released by Shanghai Police Officials.  Xu has been released after 24 hours, as the official questioned him regarding an investors’ accusations that OKEx manipulated bitcoin futures on its platform.

cnLedger, a Chinese crypto, and Blockchain news outlet reported the news via Twitter:

Star Xu, founder of OKCoin/OKEX, is being investigated by Shanghai police. According to Lu Jun, officer at the local PD, Xu was suspected of fraud accused by investors. SH police has accepted the case.

Another tweet by cnLedger later stated that, after an intense questioning session, Star Xu’s company was found not related to the alleged scheme.

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.

 The latest round of report suggests that Xu was released as the Shanghai police could only detain for 24 hours.

 

The allegation 

According to Caixin, a Chinese business media outlet, a group of investors filed a complaint allegedly claiming a loss of a significant amount of funds on OKEx due to a system crash they alleged the platform orchestrated. The investors further stated that following the major drop in bitcoin price, their bitcoin futures positions were force liquidated on Sept. 5.
But before the investors could clear their positions prior to the forced liquidation, the OKEx’s service crashed. At the time of writing, OKEx had not published any statement on the alleged system issue.

China’s Cryptocurrency Crackdown

The Chinese government has ordered a ban on all crypto and ICO activities in the country, citing that authorities have noted an increase in the number of fraudulent activities and the citizens have concurrently lost lots of funds this way.

The incidence with Star Xu outlines they vigor with which the Chinese authorities are cracking down on ICO and crypto activities in the country. The government has already restricted internet access to foreign crypto exchanges and has requesting popular messaging app of WeChat, to block certain accounts. Many companies like Baidu, Alibaba, and Tencent have Block Cryptocurrency Forums, following the government’s decision.

However, the country’s citizens haven’t accepted the new regulations and some have either moved their crypto activities outside the country’s borders or started using VPNs (Virtual Private Networks) to trade cryptocurrencies online.

Arshmeet Hora

The idea of expressing one’s views and reviews through words is beyond intriguing. What started as a creative let out has now become a passion and a profession for Arshmeet K Hora. In her own words ” with every word, every article that I write, my passion towards this medium has grown stronger.”  Arshmeet covers latest crypto news and updates as well as what happening new revolving around Blockchain Technology.

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