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JAN 25, 2024

ACE Exchange in turmoil as Taiwanese prosecutors broaden investigation

by CoinNess Global

Taiwanese prosecutors have expanded their inquiry into ACE Exchange, urging the detention of Chenhuan Wang, the platform’s president and partner at Chien Yeh Law Offices.
The Taipei District Prosecutors Office disclosed to The Block that Wang, alongside four other suspects, was summoned after police raids in Northern Taiwan earlier this month. Subsequent to the interrogation, prosecutors sought Wang’s detention and restrictions on visitation rights, alleging his involvement in money laundering and fraud linked to the activities orchestrated by the detained founder, David Pan.
Chien Yeh Law Offices has moved to distance itself from its partner’s activities, stating that the matter is a personal investment of Wang’s. It stated:
”Ace Digital Innovation Co., Ltd. is the personal external investment affairs of lawyer Wang Chenhuan and has nothing to do with the firm.”

Misleading advertising

Pan, along with colleague Lin Nan, is accused of a three-year collaboration, utilizing misleading social media advertisements to deceive investors into acquiring worthless cryptocurrencies, including MOCT. The inclusion of Wang in the investigation now requires a court determination on potential detention.
ACE Exchange responded to Pan’s arrest earlier, asserting that Pan had ceased daily operations in 2022, with Wang assuming the presidency in September 2023. Wang claimed to have initiated efforts to delist controversial coins, with ACE assuring cooperation with investigations as a witness. The exchange affirmed the normalcy of trading and operational conditions, emphasizing the security of user assets and smooth cryptocurrency and New Taiwan dollar deposit and withdrawal services.
Established in 2018, ACE Exchange ranks among Taiwan’s prominent crypto exchanges, alongside BitoGroup and MaiCoin. In spite of alleged wrongdoing relative to key actors within the business, the platform has outlined its commitment to legal principles, stating zero tolerance for any misconduct within its management team.

Regulatory focus on offshore exchanges

In the broader context of Taiwan’s crypto landscape, the Financial Supervisory Commission (FSC) plans to impose restrictions on offshore cryptocurrency exchanges operating within its jurisdiction, unless they secure required registration. In September last year, the FSC drafted guiding principles for virtual asset service providers (VASPs).
These guidelines aim to fortify information disclosure, set review standards for virtual asset listing and delisting and ensure the secure separation of companies’ and customers’ assets. The FSC intends to strictly prohibit illegal business solicitation by foreign crypto firms, mandating registration and compliance declarations with anti-money laundering regulations. Failure to comply will result in the prohibition of business solicitation within Taiwan or from domestic residents by foreign VASPs.
As Taiwanese prosecutors intensify their efforts, the ACE Exchange case unfolds as a critical episode in the evolving regulatory landscape, prompting both legal scrutiny and a reevaluation of the country’s approach to crypto oversight.
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