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David Pan, the founder of Ace Exchange in Taiwan, along with six other individuals, has been indicted by a Taiwanese court on April 8 on charges related to money laundering and cryptocurrency fraud involving digital assets valued at NT$340 million New Taiwan dollars ($10.7 million).
The court ordered the confiscation of the defendant’s property and other assets worth $110,000.
Pan is accused of defrauding at least 162 individuals by offering a fraudulent product through over-the-counter (OTC) exchanges and fake investment platforms. He allegedly created an offshore trading platform that included a cryptocurrency wallet service named “Alfred Wallet,” which was used to deceive victims into depositing their funds. Once the funds were deposited, investors lost access to them, realizing they had been scammed only when attempting to withdraw their cryptocurrencies or locked out of their wallets after depositing them.
In response to the indictment, Ace Exchange released a statement distancing itself from Pan and clarifying that the wallet service involved in the case was not a product of Ace but was developed by a third-party team hired by Pan. The exchange assured users that its operations were unaffected, emphasizing the security of user assets and the smooth functioning of deposit and withdrawal services.
Pan, a former executive, had not been involved in the daily operations of Ace Exchange since 2022, according to the exchange.
Taiwan has seen a surge in cryptocurrency fraud and money laundering cases. Another incident involved a collaborator named Lin, accused of orchestrating a cryptocurrency fraud scheme with Pan. Authorities seized cash and cryptocurrencies during a raid on Lin’s residence, leading to the delisting of certain trading pairs on Ace Exchange.
In a separate case, Yuting Zhang, the COO of Bitgin exchange, was arrested for alleged involvement in a money laundering network, while another individual named Chuang was arrested for fraud and money laundering using Bitcoin ATMs imported into Taiwan without proper reporting to the Financial Supervisory Commission (FSC).
The impact of such incidents, coupled with events like FTX’s collapse, has affected Taiwanese investors, leading to a push for regulations to protect crypto investors in the country. Taiwan’s Financial Supervisory Commission (FSC) has announced plans to introduce new digital asset regulations in September 2024.
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