Updated on May 8, 2024: Former CEO of ACE Exchange, Wang Chenhuan, has had his bail increased to NT$8 million and must wear an electronic ankle monitor.
Earlier this year, ACE Exchange, once one of the top three cryptocurrency exchanges in Taiwan, was hit with allegations of fraud involving its founder, Pan Yizhang, and CEO Wang Chenhuan. On April 26, the Taipei District Prosecutors Office announced the conclusion of its investigation and sought over 20 years of imprisonment for four main suspects, including Wang Chenhuan, who was accused of colluding with the fraud ring. Additionally, the lawyer implicated in the fraud, Wang Chenhuan, was also sought for a sentence of over 12 years.
Initially, Wang Chenhuan was granted bail of NT$4 million, with restrictions on leaving the country and a requirement to report to the local police station on a weekly basis. However, the prosecution filed an appeal, leading to another court hearing last night (May 7). In the courtroom, Wang Chenhuan pleaded guilty to all charges, including hiding criminals and providing detailed information about money laundering. The court ultimately ruled to increase his bail to NT$8 million and imposed restrictions on leaving the country and residing at sea. He will also be required to wear an electronic ankle monitor for eight months.
Updated on April 26, 2024: ACE Exchange founder Pan Yizhang and prominent lawyer Wang Chenhuan both face heavy prison sentences.
ACE Exchange, once one of the top three cryptocurrency exchanges in Taiwan, was hit with allegations of fraud earlier this year. The Taipei District Prosecutors Office has now concluded its investigation and has filed charges against 32 individuals. Among them, Pan Yizhang, Lin Genghong, and three other main suspects face sentences of over 20 years for their involvement in the fraud ring. Wang Chenhuan, the lawyer accused of colluding with the fraud ring, is also facing a sentence of over 12 years.
According to the indictment by the Taipei District Prosecutors Office, Lin Genghong, Pan Yizhang, and others knowingly promoted virtual currencies such as MOCT Coin, CSO Coin, FITC Coin, NFTC Coin, and BNAT Coin, which had no practical applications. They wrote false white papers through organized division of labor and operated ACE Exchange and the overseas exchange ProEx in Taiwan. They fraudulently raised over NT$800 million by listing these virtual currencies on the two exchanges.
Lin Genghong, Pan Yizhang, and the other four individuals were the core members of the criminal group who colluded with each other using their professional knowledge and influence in the cryptocurrency industry. They denied their involvement after committing the crimes and have requested prison sentences of at least 20 years.
ACE Exchange CEO Wang Chenhuan was aware that these “air coins” had no real value. The team members listed in the white papers were fictional, and yet he played the role of a “strategic adviser” and taught Lin Genghong and others to modify the contents of the white papers to meet formal requirements. He also arranged for the virtual currencies to be exchangeable for physical goods or services and listed them on DEEPCOIN and UNISWAP exchanges, making these “air coins” appear to have real-world applications and be tradable on other platforms.
In addition, Wang Chenhuan leaked investigative secrets, provided hiding places for Lin Genghong, who was wanted by the authorities, and even laundered the proceeds of the crimes through overseas law firms, obstructing the investigation by law enforcement agencies. After committing the crimes, he showed no remorse and has requested a prison sentence of at least 12 years.
Original article from March 28: ACE Exchange’s request for a temporary agent has been rejected! Salary payments for employees may be affected.
ACE Exchange, one of Taiwan’s top three exchanges, was exposed for fraud on January 4th this year. Its former executives, Pan Yizhang and Wang Chenhuan, were accused of cryptocurrency fraud and illegally raising hundreds of millions of dollars. A total of 11 individuals involved in the case have been detained, and cash amounting to NT$111.52 million and cryptocurrencies worth NT$180 million have been seized.
According to the court’s verdict, Wang Chenhuan, the company’s CEO and sole shareholder, is currently detained, which has led to the company’s inability to operate normally. This includes difficulties in using company seals, resulting in the suspension of business operations and the inability to transfer funds in and out of bank accounts. As a result, employee salaries, system maintenance costs, and other expenses cannot be paid.
Recently, Wang Huangxu, the former COO of ACE Exchange, applied to the court to appoint a temporary administrator for ACE in the capacity of a stakeholder. However, the court rejected the application, sparking discussions among the community users.
The court rejected the application, stating that the conditions for appointing a temporary administrator require that the board of directors is unable or unwilling to exercise its powers, causing significant damage to the company’s operations and urgent matters that need to be personally handled by the directors. However, the financial issues raised by Wang Huangxu, such as payment vouchers and reimbursement requests for covering ACE’s expenses, did not reach the threshold of NT$300,000, which requires the approval of the board of directors.
Additionally, although the total amount for ACE’s employee salaries in January 2024 reached NT$2.55 million, LINE conversations revealed that the CEO was responsible for approving and releasing monthly salary payments. Now that Wang Huangxu claims to be the CEO of ACE, there shouldn’t be any significant issues with the company’s management and operations.
However, Wang Huangxu pointed out that after the cooperating bank (KGI Bank) learned about the involvement of ACE’s executives in criminal cases, they had concerns about the source of transaction fees. As a result, they restricted ACE from transferring funds from its trust account to its bank account, causing a delay in the salary payments. The court stated that this situation was mainly caused by the bank’s concerns about the source of transaction fees and not the incapacity of the board of directors. Therefore, the request was ultimately rejected.
ACE Exchange responded with a statement, emphasizing that its operations are running normally and that the application process was solely to ensure corporate governance and to protect the operations from external influences. There are no financial issues involved. Currently, the Taiwanese assets of ACE Exchange users are protected by KGI Bank’s trust services, and the deposit and withdrawal services for cryptocurrencies and New Taiwan Dollars are operating smoothly. The ACE team also stated that they will retain all legal rights to pursue any defamation caused by false accusations against ACE Exchange and its employees.
Proofread by: Kuan, Chiungying
