32 People Indicted In Taiwanese Crypto Exchange Fraud Case

The ongoing saga between the Taiwanese authorities and former executives from crypto exchange ACE continues with a new round of charges pressed against its founder, David Pan, and another 31 individuals linked to the case.

The exchange and its former directors have been under investigation over alleged fraud and money laundering since January 2024. Authorities previously conducted massive raids on ACE’s headquarters and other related addresses and apprehended several individuals.

Crypto Tokens Scheme Sees 32 People Indicted

Local news outlet Taipei Times informed of a recent development in the ongoing investigation of former ACE exchange executives. On Friday, the Taipei District Prosecutors’ Office indicted 32 people related to the ACE case.

Among the accused, Pan, his business partner Lin Keng-hong, and attorney Wang Chen-huan, who served as chairman of the crypto exchange, became the primary suspects.

The prosecutors discovered that, since 2019, the suspects allegedly advised investors to purchase several tokens. The endorsement included NFTC tokens, BitNature (BNAT), and ACE’s MoChange (MOCT).

Pan and Lin promoted the tokens during talks and promised to make ACE exchange “Asia’s most complete blockchain ecosystem for cryptocurrency trading.” Moreover, the defendants wrote whitepapers and other materials to increase legitimacy.

The prosecutor alleged that during the advertisement, the suspects manipulated the tokens’ prices on the exchange to attract new investors.

When the tokens significantly lost value, investors tried to convert their holdings to New Taiwan dollars. After being unable to recover their money, the defrauded investors alerted authorities about the alleged scam.

The investigation revealed that this scheme obtained over NT$2.2 billion, worth around $67.48 million, through the sale of tokens and other blockchain products.

Pan, alongside others involved, hid the money in several locations and even bought real estate to hide the funds. Additionally, NT$43 million, worth around $1.3 million, was transferred to Wang, who then reinjected half of it to the exchange to boost the token’s prices.

Prosecutors Request Over 20 Years Prison Sentence

The investigation revealed that approximately 1,200 people were defrauded through the scam, with an estimated loss of NT$800 million, around $24.56 million. Based on the magnitude of the losses, the prosecutors recommended sentences of at least 20 years for the primary suspects, including Pan and Lin.

Moreover, they suggested a sentence of at least 12 years for Wang, who held a high position in a law firm and seemingly played a significant role in assisting in the scheme.

It’s worth noting that these charges were not the first to be pressed against ACE’s founder since the investigation started.

At the beginning of April, news broke of the indictment of David Pan and six other people for money laundering and fraud. As a result of the investigation, the prosecutors unveiled a “well-organized scheme” run by Pan and Lin.

The scheme involved using the “Alfredo Wallet App,” created by ACE’s investee company Fu Hai Digital Innovation, to engage in “offline and over-the-counter transactions of virtual currencies.”

According to the report, Pan and the other six suspects affected over 162 victims, losing NT$340 million, worth around $10.7 million. The seven defendants were consequently accused of violating the Organized Crime Prevention Ordinance, aggravated fraud, and money laundering.

ACE has previously distanced itself from the suspects, reassuring its users that Pan and the other defendants are no longer involved with the crypto exchange. Additionally, It has stated that they have been collaborating with authorities and that all operating conditions remained normal.