The Beijing Sci-Tech Report will now accept bitcoin from subscribers. Image: iStock
Image: iStock

The somewhat confusing tale of Star Xu, founder of crypto exchange OKEx, continues. Media domestically and internationally reported that Xu was arrested on Tuesday and was “assisting” officers in Shanghai to investigate fraudulent activity regarding WFEE coin, in which Xu is a shareholder.

Social media posts showed Xu in the station filing paper work but without handcuffs.

A Twitter source, “cnLedger [Not giving away ETH],” later wrote that Xu had been released from the Shanghai police on Sept. 11, adding that “preliminary investigation by Shanghai police shows that Xu’s company in Shanghai is not related to digital currency. The alleged fraud was not conducted in Shanghai but in Beijing, therefore documents will be handed to Beijing police.”

WFEE is described on the OKEx site as “the world’s first WiFi sharing eco-system based on blockchain technology designed for the globe. It is to solve security, trust, sharing willingness and privacy issues accrued from WiFi sharing based on blockchain smart contract” which does indeed avoid any mention of crypto-currencies, which are banned in China.

However, according to influential PRC business media magazine Caixin, the dispute stemmed from complaints made by a group of investors who claimed they lost significant sums of Bitcoin on the OKEx platform due to a system crash they allege was carried out by internal malicious actions.

The group of investors also allege that their Bitcoin futures positions were forced into liquidation on Sept. 5 when the price of Bitcoin saw a major drop, but OKEx’s service crash in the meantime left them without enough time to clear their positions prior to the forced liquidation.

Caixin said the group of investors found Xu by following his personal trainer to a hotel and then challenged him, face-to-face. Caixin said Xu then called the police … who then duly arrested him.

The news comes after the surge of OKEx volumes over the summer. Cointelegraph reported OKEx posting a new record volume in July 2018 with $5.7 billion, compared to June’s $2.9 billion. CoinMarketCap puts OKEx as the number exchange two globally by trade volume, trailing only Binance.

And all this in a country where crypto trading is illegal?

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