The Chinese police allegedly initiated an investigation into the EtherDelta cryptocurrency trading platform.
"EtherDelta is involved in a major fraud scheme in China. The police are officially taking legal action against them," wrote Davy Wang, a Twitter partner with Primitive Ventures, a cryptographic investment fund.
According to Wang, EtherDelta was sold by its founder Zachary Coburn in 2017 and has been controlled by Chinese citizens ever since.
In fact, Zack Coburn sold EtherDelta to a group of Chinese people who then released the EDT token and performed exit scams," Wang writes. - Angry investors complained to the police. Recently, an official investigation has been initiated into the case.
EtherDelta has previously appeared in the news in connection with the enforcement of the authorities. Last November, the U.S. Securities and Exchange Commission (SEC) filed charges against Coburn for setting up a securities exchange platform in the absence of the registration required by law.
"Almost all bids that were placed on the EtherDelta platform led to transactions after the SEC published its 2017 report on The DAO, where it indicated that certain digital assets, such as DAO tokens, are securities, and platforms that provide trading services for such securities in the form of digital assets will fall under the requirements of the SEC, according to which they must register or qualify for an exception to the rules," the U.S. regulator said in its decision.