Details of the Arrest: Former President and Partner Detained
According to Taiwanese media reports, the former president of ACE Exchange, surnamed Pan, and his partner Lin were arrested on charges of criminal fraud, money laundering, and violations of the Banking Act. The New Taipei City Criminal Investigation Brigade conducted coordinated raids at 15 locations across Taipei, New Taipei, and Taichung, including ACE Exchange's office, detaining 14 individuals including Pan and Lin.
During the operation, police seized NT$111.52 million in cash from Lin's residence and approximately NT$108 million in cryptocurrency assets from the exchange's premises, totaling over NT$200 million in illegal proceeds. Initial estimates suggest the duo's scam may have generated over NT$1 billion over three years.
Fraud Tactics: Social Media Ads Promoting 'Junk Coins'
Investigations reveal that Lin used platforms like Instagram, Facebook, and X to promote investment ads, enticing victims to purchase tokens such as MOCT (Magic Coin), NFTC, and BNAT. They falsely claimed these tokens would be listed on major domestic and international exchanges, enabling quick wealth. Pan leveraged ACE Exchange's brand trust to list these fraudulent tokens. The brigade noted that ACE exploited information asymmetry, presenting crypto as cutting-edge technology and citing Bitcoin's recent gains to exaggerate returns. In reality, victims ended up holding worthless 'garbage coins' or 'air coins,' which eventually crashed or became illiquid.
Responses: ACE Cooperates, FSC Imposes Fine
ACE Exchange issued a statement on the evening of January 4, clarifying that the case involved illegal activities by an individual token issuer from 2019, and that ACE was cooperating as a witness. The exchange emphasized that its president, Wang Chen-huan, who took office in September 2023, has focused on compliance and has fully cooperated with authorities, delisting the disputed tokens. The statement added: 'The controversy and violations of specific project parties have not impacted ACE's operations. We will operate more cautiously and strive to maintain our top-three position in Taiwan's market.'
Separately, at the start of 2024, two incidents have rocked Taiwan's crypto sector. In addition to the ACE case, Honghan Creative Co. was fined NT$500,000 by the Financial Supervisory Commission (FSC) for failing to submit an anti-money laundering compliance statement while operating virtual currency services. The FSC stated that the case was referred by the Investigation Bureau and Tainan City Police, and Honghan Creative admitted to the violation. The company was ordered to complete the statement or face recurring penalties.