David Pan, the creator of the Taiwanese cryptocurrency platform ACE, is among seven individuals accused of fraud and money laundering by prosecutors. As stated in the official communique, a judge has authorized the seizure of Pan’s possessions.
Crypto Fraud Investigation Ends With Indictment And Seizing Of Assets
In January 2024, it was revealed that one of the biggest crypto exchanges in Taiwan, ACE exchange, was under investigation by the police for suspected fraud. The probe exposed a carefully planned scam orchestrated by ACE’s founders, David Pan and Lin Nam, to swindle people into investing in virtually worthless digital currencies.
Police simultaneously searched and seized over 15 places, among them being ACE headquarters. Fourteen people were taken into custody there, including Pan and Lin. During these searches, approximately NT$200 million, equivalent to around $6.4 million, were confiscated.
An ongoing probe into alleged money laundering and fraud at ACE and its subsidiary, Fu Hai Digital Innovation Company, led to the filing of criminal charges against Pan and six other individuals by the Taichung District Attorney’s Office this past week.
The defendants are alleged to have broken laws against organized crime, committed serious fraud, and engaged in money laundering. According to the announcement, approximately 162 people suffered losses, and the value of the fraudulent transactions exceeded NT$340 million, or roughly $10.7 million.
The prosecution team argued before the Taiwanese judge that the “significance of the crime circumstances” and “gravity of the malice” were important factors to take into account. Consequently, the judge granted the request to confiscate the property of the seven suspects.
Approximately NT$3.48 million worth of cryptocurrency, NT$27.5 million in real estate, NT$140,000 in savings, and NT$485,000 in cash were confiscated, bringing the total seized assets above NT$31.6 million.
Web of Lies And ACE’s Response
Prosecutors discovered that the suspects conducted virtual currency exchanges outside of online platforms and through the “Alfred Wallet” application instead.
Based on the announcement, Fu Hai developed the Alfred Wallet and introduced the A+Card, which subsequently became involved in fraudulent activities. These stored-value virtual currency cards were marketed through deceptive online investment platforms.
Using social media platforms, deceitful individuals stirred up interest in investing in virtual currencies, claiming potential significant profits. They also endorsed buying TIDE tokens exclusively from certain vendors.
According to the findings of the investigation, the suspect exploited the common perception that brick-and-mortar stores are more reliable. Consequently, they persuaded the victims to buy Fu Hai’s Alfred Wallet tokens from local stores authorized to sell them.
Store employees would help victims save their tokens in the Alfred Wallet using the A+Card. But, the defendants employed a hidden mode in the app for managing wallets. By doing so, they prevented the public from tracing the transferred currency transactions in the blockchain record.
Afterward, the fraudsters exploited the system to tamper with users’ wallet addresses and manage their funds from behind the scenes. When victims attempted to withdraw their money, the deceitful group would provide justifications such as “misplaced orders” or “account malfunctions,” or simply decline to explain.
After being indicted, ACE issued a statement to make it clear that they are not associated with their founder. Regarding the Alfred Wallet crypto exchange, ACE wanted to emphasize that this was not something they produced in-house. Instead, it was developed by an external party at the request of their former director, Pan.
In the end, the platform assured its users that their trading activities and operations were running smoothly, providing a sense of security regarding the protection of users’ assets.
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2024-04-11 01:41