Star Xu, the founder of exchange services provider OKCoin and the world’s second-largest crypto exchange OKEx, has allegedly been detained in China in relation to suspected digital currency fraud, local news outlet Sina News reports September 11.
According to the news outlet, Xu is currently being held in the Shanghai Weifang Xincun police station, and will be released within 24 hours if insufficient evidence is found of his participation in suspected fraud.
Tech news sources ZeroHedge reports that investors in WFEE Coin — a company where Xu is a shareholder — complained to the police about the company’s allegedly fraudulent practices, prompting the police to bring Xu in for questioning.
As ZeroHedge writes, WFEE issued tokens and sold them through their website. As a WFEE shareholder, Xu can be held responsible for any kind of fraud related to the company.
However, the investigation has seemingly shown that Xu’s company in Shanghai is not related to issuing the WFEE Coin, ZeroHedge notes, adding that it makes “little sense” for them to defraud investors through a Beijing subsidiary.
The news of Xu’s detentions comes shortly after OKEx volumes significantly surged this summer. As Cointelegraph reported earlier in August, OKEx posted a new record in July 2018 with $5.7 billion in volume, as compared to June’s $2.9 billion.
After the news of Xu’s alleged detention broke today, CoinMarketCap data showed that OKEx saw an almost 3 percent drop in trading volume over a 24 hour period, having traded around $714 million on the day.