OKEx Explain Why Boss Star Xu Was in Police Custody
He was earlier accused of committing fraud through the WFEE crypto.
The Arrest of Star Xu
On Tuesday this week, it emerged that OKEx boss Star Xu was in police custody. Photos that were circulated on social media showed Xu being grilled by police officers in Shanghai.
Reports appearing in the CNLedger publication indicated that Xu was a man of interest to the authorities after a complaint from various investors under the WFEE project. The investors had complained that the crypto was a scam. Xu was allegedly questioned as a shareholder in the crypto, and he was part of the team that rolled out the currency.
An officer from the Shanghai police department further gave more details about Xu’s arrest. According to Lu Jun, Xu was accused of aiding fraud, and local police were looking into the matter. Early investigations revealed that Xu’s firm based in Shanghai had no links to the cryptocurrency. He noted that the crime in question was conducted in Beijing. Jun added that the case files would be transferred to authorities in the capital.
Currently, OKEX’s Binance is rated as the second largest exchange for cryptocurrencies. On Thursday, the team released a statement detailing Xu’s link with the WFEE. The statement highlighted the relationship between OK Blockchain Capital which is a Binance partner.
OKBC’s Deal With WFEE
According to OK, its investment in the WFEE project was on an institutional basis. The investment took place when WFEE had partnered with WeShare WiFi. Later, WFEE grew, and managed to get shares in OKBC, and other companies. OKBC further highlighted that it was independent of the operations of WFEE. It further denied claims that Xu does not have any shares in WFEE. It termed the reports as fake. The statement further pointed out that OKEx had issued an alert to its users about risks posed by WFEE.
Many wondered why Xu was not detained by Shanghai police officers. If he was a shareholder at any given time, then he would be liable for detention. He was in custody to represent OKBC. As a shareholder, authorities would have charged him with taking part in the illegal securities distribution.
At this point, it is unlikely that Xu alongside OKEx will face any charges since the investment in the crypto was done on an institutional basis. Both parties will not take responsibility for concerns raised by investors.
Last month, OKEx went ahead and issued an alert to users against the WFEE crypto. In a statement, OKEx stated that the audit team had conducted investigations, and determined that WFEE was not suitable for trading. It is not clear whether the OKEx move to list WFEE was the main reason behind interest from authorities.