On September 11, pictures of Star Xu, the founder and CEO of Ok Group, the parent company of crypto exchange OKEx, currently being investigated by Shanghai law enforcement circulated all over on the web cryptocurrency communities.

CNLedger, a trustworthy news supply in the Chinese cryptocurrency community, documented that Xu was investigated by law enforcement officers in Shanghai after buyers submitted complaints concerning a community cryptocurrency called WFEE. Investors claimed that Xu was a shareholder of WFEE and included in the approach of releasing the WFEE coin to the market.

“Sina Information: Star Xu, founder of OKCoin/OKEX, is currently being investigated by Shanghai law enforcement. In accordance to Lu Jun, officer at the community PD, Xu was suspected of fraud accused by buyers. SH law enforcement has recognized the case. Preliminary investigation by Shanghai law enforcement shows that Xu’s company in Shanghai is not similar to electronic currency. The alleged fraud was not performed in Shanghai but in Beijing, therefore files will be handed to Beijing law enforcement,” CNLedger documented.

OKEx Responds

On September 13, OKEx, the world’s 2nd premier cryptocurrency exchange driving Binance, publicly shared the formal statement of Ok Blockchain Capital, a strategic husband or wife of OKEx and a subsidiary of Ok Group, which immediately addressed the alleged relationship between Xu and WFEE.

The Ok Blockchain Capital workforce said that it invested in WFEE as an institutional trader when WFEE was a husband or wife of WeShare WiFi, a world-wide major WiFi sharing company. Sooner or later, as WFEE grew, it obtained the investments of OKBC and other expense corporations.

As this sort of, Ok Blockchain Capital said that it has no authority above the functions of WFEE and that Xu has never ever been a shareholder of WFEE, refuting reviews that Xu was allegedly included in the token distribution of WFEE.

“The rumor that Ok Group founder Star Xu currently being a shareholder of WFEE is bogus. Mr. Xu has no fairness connection with WFEE and its company. We recognize that the OKEx exchange has warned it customers of the potential threat of WFEE very last thirty day period and disclosed WFEE in their very first OKEx Token Delisting / Hiding Guideline,” the Ok Blockchain Capital workforce reported.

If Xu experienced been included as a shareholder at any place in the company’s background, the Chinese law enforcement could have detained Xu for participating in the illicit distribution of securities and for currently being included in an original coin featuring (ICO), which is strictly prohibited in China, offered that OKEx experienced listed WFEE in March.

Even so, offered that Xu was not included immediately in the enterprise of WFEE and a subsidiary of Ok Group invested in WFEE as an establishment, it is unlikely that Xu nor OKEx will experience any consequence from the complaints filed by community buyers.

Token Delisting

As Ok Blockchain Capital reported, OKEx also delisted WFEE and warned customers from the cryptocurrency on August 10.

“To maintain a healthy trading natural environment and pleasant trading practical experience on OKEx, our auditing workforce has carried out extensive checking on the market and assignments,” the OKEx workforce reported at the time, after delisting WFEE on its platform.

Nonetheless, it remains unclear irrespective of whether the decision of the exchange to listing WFEE in march could be an concern for the Chinese govt, even though OKEx is based in Hong Kong, outside of the mainland.

Showcased picture from Shutterstock.

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