Key Takeaways
- Pan and Lin allegedly defrauded over 1,200 investors by heavily promoting low-quality virtual currencies with little to no real-world use
- Prosecutors allege the scheme resulted in estimated total losses of US$24.56 million
Taiwanese prosecutors are recommending a harsher sentence extending upto a 20-year prison term for the four main suspects in the money laundering case tied to crypto exchange Ace Exchange. The indictments, handed down in April 2024, target former Ace Exchange founder David Pan, his business partner Lin Keng-hong, and prominent attorney Wang Chen-huan, who served as the exchange’s chairman, along with 29 others.
The main accusation is that Pan and Lin orchestrated a scheme to defraud more than 1,200 investors by heavily promoting low-quality virtual currencies with little to no real-world use, including MoChange Token, CSO, FITC, NFTC, and BNAT. Prosecutors allege the scheme resulted in estimated total losses of NT$800 million (US$24.56 million). This marked a steep increase from the previous estimated losses of 340 million NT$ ($10.6 million).
The prosecution’s case relies on the year 2019, when Pan, Lin, and Wang allegedly created promotional materials to launch Ace Exchange and ProEx platforms specifically for trading these dubious virtual currencies. The prosecutors further argue that the accused established sales team with the sole purpose of aggressively pushing these low-grade cryptocurrencies through misleading online advertisements.
Investigators believe the group amassed a significant fortune through the scheme, standing at a staggering NT$2.2 billion (US$67.48 million) from the sale of these cryptocurrencies. Prosecutors allege Pan and Lin employed a variety of techniques to launder the money, including hiding millions of dollars in cash around Taipei and using some of the funds to purchase real estate in Yilan County.
The investigation gained traction in January 2024 after several complaints from defrauded investors surfaced. In response to the complaints, Taipei City Police raided on Ace’s headquarters and other linked locations, leading to the arrest of Pan and 14 others.
The investigation state that the alleged scheme also involved the use of a wallet app called “Alfredo Wallet App,” developed by an investee company of Ace Exchange- Fu Hai Digital Innovation. Investigators believe this app facilitated “offline and over-the-counter transactions of virtual currencies,” which helped aid the money laundering operation.
Pan, Lin, and Liang are looking at a minimum 20-year prison term, while Wang, who prosecutors claim used his legal expertise to aid the scheme, could receive a minimum jail term of 12 years.
“In light of the extensive fraud and the numerous victims involved, prosecutors have requested that the court sentence the four primary defendants to no less than 20 years in prison,” a spokesperson for the Taipei District Prosecutors’ Office noted.
In response to the indictment, Ace Exchange earlier had stated that Pan and his fraudulent activity had no relation with the platform citing that he allegedly ceased involvement in its day-to-day operations back in 2022.
