Update May 8, 2024: Former CEO of ACE Exchange, Wang Chenhuan, has had his bail increased to 8 million yuan and is required to wear an electronic ankle monitor.
ACE Exchange, once one of the top three cryptocurrency exchanges in the country, was exposed at the beginning of the year for alleged involvement in a fraudulent scheme by its founder, Pan Yizhang, and CEO, Wang Chenhuan. On April 26, the Taipei District Prosecutors Office announced the conclusion of its investigation and sought over 20 years of imprisonment for the main suspects, including Wang Chenhuan, who was also implicated in the fraudulent scheme.
Originally, Wang Chenhuan was granted bail of 4 million yuan, with restrictions on travel and weekly visits to the police station. However, the prosecution filed an appeal, leading to a new ruling on the evening of May 7. In court, Wang Chenhuan admitted to all charges, including hiding criminals and providing detailed information about money laundering. The court ultimately increased his bail to 8 million yuan, imposed restrictions on travel and residency, and ordered him to wear an electronic ankle monitor for eight months.
Update April 26, 2024: ACE Exchange Founder Pan Yizhang and prominent lawyer Wang Chenhuan both face severe sentences.
ACE Exchange, once one of the top three cryptocurrency exchanges in the country, was exposed earlier this year for alleged fraud involving its founder Pan Yizhang and CEO Wang Chenhuan. Over 1,200 victims were affected, resulting in losses of nearly 800 million yuan. The Taipei District Prosecutors Office has concluded its investigation and has charged 32 individuals.
Among them, Pan Yizhang, Lin Genghong, and four other main suspects are facing sentences of over 20 years, while lawyer Wang Chenhuan, who is accused of colluding with the fraudsters, is facing a sentence of over 12 years.
According to the indictment by the Taipei District Prosecutors Office, the defendants, including Lin Genghong and Pan Yizhang, knew that the virtual currencies MOCT Coin, CSO Coin, FITC Coin, NFTC Coin, and BNAT Coin had no practical application. However, they collaborated through organized division of labor to write false white papers. They operated ACE Exchange and the overseas exchange ProEx, listing the virtual currencies on both platforms and defrauding at least 800 million yuan.
Lin Genghong, Pan Yizhang, and the other four individuals were the key figures in the criminal organization. They colluded with each other, utilizing their expertise and influence in the cryptocurrency community to commit fraud. After being caught, they denied their involvement and requested sentences of over 20 years.
ACE Exchange CEO Wang Chenhuan was aware that these “air coins” had no real value. The names of the team members listed in the white paper were fictional, but he played the role of a “strategist” and instructed Lin Genghong and others to modify the contents of the white paper to meet formal requirements. He also arranged for the virtual currencies to be exchangeable for physical goods or services and listed them on DEEPCOIN and UNISWAP exchanges, making these “air coins” appear to have real-world applications and be tradable on other platforms.
In addition, Wang Chenhuan leaked confidential information from the investigation, hid Lin Genghong’s whereabouts, and even laundered the proceeds of the crime through overseas law firms, obstructing the investigation by law enforcement agencies. He showed no remorse after being caught and requested a sentence of over 12 years.
Original article from March 28th:
ACE’s Application for Temporary Agent Rejected! Salary Payments for Employees at Risk
ACE Exchange, one of Taiwan’s top three exchanges, was exposed for fraud on January 4 this year. The former executives, Pan Yizhang and Wang Chenhuan, were implicated in a cryptocurrency scam, illegally raising hundreds of millions of yuan. Eleven individuals involved in the case were detained and had their assets seized, including cash totaling 111.52 million yuan and 180 million yuan worth of cryptocurrencies.
According to the court’s judgment, Wang Chenhuan, the company’s CEO and sole shareholder, is currently under detention, which has led to the company’s inability to operate normally. This includes difficulties in stamping documents and the suspension of business operations, as well as the inability to transfer funds in and out of bank accounts, resulting in the inability to pay employee salaries and cover system and operating expenses.
Recently, Wang Huangxi, the former COO of ACE Exchange, applied to the court to appoint a temporary administrator for ACE in his capacity as an interested party. However, the court rejected the application, sparking discussions among the community.
What was the reason for the court’s rejection?
The court rejected Wang Huangxi’s application, stating that the conditions for appointing a temporary administrator are that the board of directors is unable or unwilling to exercise its powers, causing damage to the company’s operations. There must also be urgent and specific matters that require the personal attention of the directors before a temporary administrator can be appointed.
In regard to the financial issues raised by Wang Huangxi, whether it be unpaid invoices or reimbursement requests for expenses paid on behalf of ACE, the amounts did not meet the threshold of 300,000 yuan that required board approval.
Furthermore, although the total salary for ACE employees in January 2024 amounted to 2.55 million yuan, LINE conversations revealed that the CEO was responsible for approving and releasing monthly salary payments.
Currently, Wang Huangxi claims to be the CEO of ACE, so there should not be any major issues with the company’s management and operations.
However, Wang Huangxi pointed out that after the cooperating bank, KGI Bank, became aware of the criminal case involving ACE’s executives, they had concerns about the source of transaction fees. As a result, ACE was unable to transfer funds from its trust account to its bank account, leading to the delay in salary payments.
The court stated that this situation primarily resulted from the bank’s concerns about the source of transaction fees and did not fall under the category of the board of directors’ inability to function or exercise its powers. Therefore, the application was ultimately rejected.
ACE’s Response: Business as Usual
ACE Exchange promptly issued a statement emphasizing that its operations are running smoothly and that the application process was solely for the purpose of implementing corporate governance to ensure that its operations are not affected by external forces. There are no financial issues involved.
Currently, the Taiwanese assets of ACE Exchange users are protected by KGI Bank’s trust services, and the deposit and withdrawal services for both cryptocurrencies and New Taiwan Dollars are functioning smoothly.
The ACE team also stated that they will retain all legal rights to pursue any defamation caused by false accusations against ACE Exchange and its employees.
Proofread by: Kaitlyn Hung