OKCoin’s founder Star Xu was taken for questioning by the police in Shanghai on September 10th after investors had confronted him at a hotel where he was staying.
A video is apparently circulating in China of Xu (pictured) telling the police he was surrounded by seven to eight people, which he found “life-threatening.” The police replied: “Their behaviour cannot constitute a criminal offence. You can launch a civil lawsuit if needed.”
There are suggestions this was disgruntled margin traders who got called on September the 5th after bitcoin’s price quickly fell, but apparently they couldn’t access OKEx to close their position. OKEx’s head of operations, Andy Cheung, publicly said:
“As far as I know, Star called the police for help when he was surrounded by a group of people in Shanghai. The police arrived on the scene and invited all of them to the police station.
While Star was invited to help with the investigation and those people was detained, they raised a fraud complaint against Star. Star stayed to clarify and then left afterwards…
Star is the founder of OK Group, although we are good friends, he does not run OKEx.”
There is some dispute as to who exactly called the police with the investors seemingly claiming, with some apparent documentary evidence, that they called the police.
Moreover, rather than disgruntled margin traders, this seems to have more to do with a little known project which is not even listed on Coinmarketcap called WFEECoin, which describes itself as a decentralized wifi sharing ecosystem based on blockchain tech. OK Blockchain Capital (OKBC), a Venture capital fund and a strategic partner of OKEx, publicly said:
“Regarding Star Xu’s News: OK Blockchain Capital (OKBC) is one of the institutional investors of WFEE. WFEE has acquired OKBC’s and several other capitals’ investment such as SBCVC when it was still the prime partner of WeShare WiFi – a global leading WiFi sharing company.
The afterward changes of WFEE white paper and team members have not been give notice to OKBC. OKBC as merely a venture capital neither participates in the project operation nor be responsible for the project operation results.
The rumor that OK Group founder Star Xu being a shareholder of WFEE is fake. Mr. Xu has no equity relationship with WFEE and its company.
We notice that the OKEx exchange has warned it users of the potential risk of WFEE last month and disclosed WFEE in their first OKEx Token Delisting / Hiding Guideline.
Investing and trading digital assets is risky, we kindly remind clients to please be cautious and rational.”
The investors seemingly allege price manipulation and fraud after OKEx announced they are to delist WFEE and remove it from trading. The matter is now sent to the Bejing police as that’s where the alleged fraud occurred.
Whether it will be investigated further is unclear, but Xu was released from questioning, with the OKCoin founder apparently stating at the police station: “I won’t pay you a penny.”