After SEC, Chinese police now investigating crypto token trading platform EtherDelta

Local police in China are reportedly investigating cryptocurrency token trading platform EtherDelta, months after the U.S. Securities and Exchange Commission (SEC) charged the platform’s founder Zachary Coburn.

“EtherDelta is involved in a major scam in China, police officially take legal action against it,” tweeted Dovey Wan, a partner at cryptocurrency investment fund Primitive Ventures, on Wednesday.

Wan further said that Coburn sold EtherDelta to a group of Chinese buyers, who later issued exchange token EDT and it turned out to be an “exit scam.” Apparently, “furious” investors of the token complained to the police.

Back in November, the SEC charged Coburn for operating an unregistered securities exchange. The regulator said at the time:

“Almost all of the orders placed through EtherDelta’s platform were traded after the Commission issued its 2017 DAO Report, which concluded that certain digital assets, such as DAO tokens, were securities and that platforms that offered trading of these digital asset securities would be subject to the SEC’s requirement that exchanges register or operate pursuant to an exemption.”

Coburn settled the SEC charges at the time, although not admitting or denying the accusations.

Chinese police show “no mercy” if any cryptocurrency scam involved a large amount of retail capital, Wan concluded.