As reported by Cointelegraph, a series of tweets published by Dovey Wan, the founding partner at blockchain-focused investment firm Primitive Ventures, indicated that the alleged scam involved the sale of native exchange asset EtherDelta Token (EDT) after the exchange was acquired by unnamed Chinese investors.
“The actual beneficiaries of EtherDelta are all Chinese after ownership transition in 2017,” Wan tweeted, adding that EtherDelta founder Zackary Coburn had sold the platform to a group of Chinese investors who would later issue the EDT exchange token as part of an exit scam.
In a followup tweet, Wan said Chinese police show “no mercy” when it comes to crypto scams large amounts of retail capital.
Last year, the exchange faced legal difficulties when Coburn was charged by the U.S. Securities and Exchange Commission (SEC) with operating an unregistered securities exchange.
Although Coburn neither admitted nor denied the findings, he nonetheless agreed to cooperate and pay the state US$300,000 in unlawful profits. He also paid US$13,000 in prejudgement interest and a penalty of US$75,000.
In May, crypto analytics startup Coinfirm found that over 500 of the Ether (ETH) stolen from hacked New Zealand-based crypto exchange Cryptopia – worth more than US$125,000 – had been moved to EtherDelta.
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