According to Dovey Wan, EtherDelta is involved in an exit scam in China and the police have taken legal action against it.
“The actual beneficiaries of EtherDelta are all Chinese after ownership transition in 2017”.
The problem would be related to the EtherDelta token (EDT), whose dollar price actually collapsed almost to zero in May, with a collapse that began as soon as exchange rate data became available.
“Basically Zack Coburn sold EtherDelta to a group of Chinese who later issued exchange token EDT and turned out to be a exit scam.
Now furious investors of EDT whistle blowed to local police the case was recently taking into official investigation process”.
A subsequent tweet included the deed of transfer from Zack Coburn to the Chinese, found by the local police, and another also featured a document from the New York Court reporting an alleged scam by Jun Chen, the Chinese purchaser of EtherDelta.
Dovey Wan is a founding partner of Primitive Ventures, a blockchain-focused investment firm with Chinese origins. As such, he follows the Chinese market and understands the language.
It is assumed that the new Chinese owners of EtherDelta have used the platform to perform an exit scam through an ICO. The platform was actually sold in 2017, while the EDT token was allegedly put on the market in August 2018.
EtherDelta is a non-custodian exchange for the trading of ERC20 tokens and allows users to trade digital assets through smart contracts based on the Ethereum blockchain.
In 2018, the SEC accused founder Zack Coburn of running an unauthorised exchange, with the result that Coburn would later pay more than $300,000 in taxes and fines for illegal profits.