Taiwanese crypto exchange founder David Pan indicted for fraud

Founder of Taiwanese cryptocurrency exchange Ace Exchange, David Pan, has been indicted along with six other suspects on charges of fraud and money laundering.

The indictment was announced by Taiwanese prosecutors who revealed that the accused caused losses amounting to 340 million New Taiwan dollars ($10.6 million).

The legal action follows the January 2024 arrest of Pan and 14 others in connection with the case, after police conducted raids on multiple locations, including the headquarters of Ace Exchange. Investigations have identified Pan as a key figure involved with the fraudulent cryptocurrency wallet service known as “Alfred” or “Afu wallet,” alongside a related cryptocurrency card scheme.

Prosecutors allege that the group engaged in a classic high-reward promise scheme, deceiving customers through offline over-the-counter exchanges and bogus investment groups. Victims found themselves unable to withdraw deposited funds or discovered their accounts were inexplicably blocked.

Following these developments, a Taiwanese court has ordered the seizure of the defendants’ properties, with a portion of the confiscated assets valued at a minimum of 3.5 million NT$ ($110,000).

Ace Exchange issued a statement on the day of the indictment, clarifying that Pan’s alleged fraudulent activities were unrelated to the operations of the exchange. According to the statement, Pan had not been involved in the day-to-day operations of the company since 2022.

The statement further distanced the exchange from the implicated wallet product, noting it was developed by an external team under Pan’s direction, not as an official Ace Exchange offering. The company also pledged full cooperation with the authorities in their investigation.

Ace Exchange assured its customers and the public that its trading and operational activities remain unaffected by the case. The exchange also confirmed that deposit and withdrawal services for all cryptocurrencies and New Taiwan dollars are functioning normally.

Launched in late 2018, the exchange reportedly handles daily trades worth around $14 million. However, according to Traders Union, Ace Exchange is considered a “high-risk cryptocurrency exchange,” with a trust score of only 2.78 out of 10.

Earlier in January, Taiwanese prosecutors asked a Taipei court to detain ACE Exchange president Chenhuan Wang on charges of money laundering and fraud. They stated that Wang, who also leads the Chien Yeh law offices, was summoned along with four other suspects following police raids across Northern Taiwan.