Updated May 8, 2024: Former ACE Exchange President Wang Chenhuan’s bail increased to 8 million yuan and he is required to wear an electronic ankle monitor.
ACE, one of the top three cryptocurrency exchanges in Taiwan, faced a scandal earlier this year when its founder, Pan Yizhang, and President Wang Chenhuan were accused of colluding with a fraud ring. The Taipei District Prosecutors Office concluded its investigation on April 26 and sought over 20 years of imprisonment for the main suspects, including Wang Chenhuan, who was also implicated in the fraud ring. Initially, Wang Chenhuan was granted bail of 4 million yuan, with travel restrictions and weekly reporting to the police station. However, the prosecution appealed, leading to a new court hearing on May 7. In the court, Wang Chenhuan confessed to all charges, including hiding criminals and providing detailed information on money laundering. The court ultimately decided to increase his bail to 8 million yuan and imposed restrictions on travel and residence, requiring him to wear an electronic ankle monitor for eight months.
Updated April 26, 2024: ACE Exchange Founder Pan Yizhang and Prominent Lawyer Wang Chenhuan both face severe penalties.
ACE, one of the top three cryptocurrency exchanges in Taiwan, was involved in a fraud case earlier this year. The founder, Pan Yizhang, and President Wang Chenhuan were accused of defrauding over 1200 victims and causing losses of nearly 800 million yuan. The Taipei District Prosecutors Office has concluded its investigation and has brought charges against 32 individuals. Pan Yizhang, Lin Genghong, and three others, who are considered the core members of the fraud ring, are facing sentences of over 20 years. Lawyer Wang Chenhuan, who is accused of colluding with the fraud ring, is also facing a sentence of over 12 years.
According to the indictment, 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 application. They wrote false white papers and operated ACE Exchange in Taiwan and ProEx Exchange overseas, listing these virtual currencies on both platforms, resulting in fraud totaling at least 800 million yuan.
Lin Genghong, Pan Yizhang, and the other four individuals used their expertise and influence in the cryptocurrency industry to collaborate and carry out the fraud, denying their involvement after the fact. The prosecution is seeking sentences of over 20 years for all of them.
Additionally, ACE Exchange President Wang Chenhuan was aware that these cryptocurrencies had no real value. He instructed Lin Genghong and others to modify the white papers to meet formal requirements and arranged for the virtual currencies to be exchanged for physical goods or services. He also listed them on DEEPCOIN and UNISWAP exchanges, giving the impression that these virtual currencies had tangible value and could be easily traded on other platforms. Furthermore, Wang Chenhuan leaked investigation secrets, helped Lin Genghong hide from arrest, and laundered the proceeds of the crime through overseas law firms, obstructing the investigation by law enforcement agencies. Wang Chenhuan showed no remorse and is facing a sentence of over 12 years.
Original Article from March 28: ACE’s Application for Temporary Proxy Denied! Salary Disbursement for Employees at Risk
ACE Exchange, one of Taiwan’s top three cryptocurrency exchanges, was exposed for fraud on January 4 this year. The former executives, Pan Yizhang and Wang Chenhuan, were accused of cryptocurrency fraud, illegally raising hundreds of millions of yuan. Eleven individuals involved in the case were detained and denied visitation rights. Authorities seized 115.2 million yuan in cash and 180 million yuan worth of cryptocurrencies.
According to the court verdict, Wang Chenhuan, the company’s sole director and shareholder, was unable to exercise his duties due to his detention, leading to the company’s inability to operate normally. This has caused disruptions, including the inability to use company seals, resulting in a halt in business operations, inability to access bank funds, and failure to pay employee salaries and operational expenses.
Recently, Wang Hao Hiro, the former COO of ACE Exchange, applied to the court to appoint a temporary administrator for ACE in his capacity as an interested party. However, the court rejected the application, sparking discussions among the community users.
What was the reason for the rejection?
The court rejected Wang Hao’s application, stating that the conditions for appointing a temporary administrator required the “board of directors to be unable or unable to perform its duties,” causing significant damage to the company’s operations and urgent matters that require the personal attention of the directors. Wang Hao’s financial concerns, including outstanding payment details and invoices for expenses paid by ACE, did not reach the threshold of 300,000 yuan, which required director approval.
In addition, although the total employee salary for ACE in January 2024 amounted to 2.55 million yuan, LINE chat records showed that the CEO was responsible for approving and releasing monthly salary payments.
Wang Hao now claims to be the CEO of ACE and believes that the company’s operations and management should not be a significant issue.
However, Wang Hao pointed out that after the cooperating bank (KGI Bank) learned about the criminal case involving the head of ACE, they had concerns about the source of fees, leading to restrictions on transferring funds from the trust account to ACE’s bank account. As a result, salary payments could not be made as scheduled.
The court pointed out that this situation was primarily caused by the bank’s concerns about the source of fees and did not relate directly to the company’s board of directors’ inability to function or whether the board could exercise its duties. Therefore, the court ultimately rejected the application.
ACE’s Response: Operations Continue as Usual
ACE Exchange promptly issued a statement emphasizing that its operations are continuing as usual. The application process was merely to ensure corporate governance and ensure that operations are not affected by external forces. There are no financial-related issues at present.
Currently, ACE Exchange users’ Taiwanese assets 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 false accusations that have caused reputational damage to ACE Exchange and its employees.
Proofread by: Samantha Wong
