The Chinese police are investigating the activities of the cryptocurrency platform EtherDelta on suspicion of organizing a fraudulent scheme.

Earlier, the US Securities and Exchange Commission (SEC) accused the founder of the EtherDelta platform, Zachary Coburn, of illegal securities trading.

Now, according to the partner of the investment cryptocurrency fund Primitive Ventures, Davey Wan (Dovey Wan), the Chinese police also drew attention to the company’s activities:

“EtherDelta is involved in a major fraud in China, the police are taking action against the company.”

Wang also said that Coburn sold EtherDelta to a group of Chinese buyers who later issued an EDT exchange token, and this scheme turned out to be fraudulent. Apparently, angry investors turned to the police.

Last November, the SEC accused Coburn of running an unregistered securities exchange. At that time, the regulator stated:

“Almost all orders placed through EtherDelta were executed after the Commission’s report, in which some digital assets, for example, DAO tokens, were recognized as securities. In addition, the Commission also concluded that platforms offering trading in such assets are subject to SEC regulation.”

Coburn then settled the case with the SEC without admitting or denying the charges. Wang concluded that the Chinese police will act “mercilessly” if cryptocurrency fraud is associated with a large volume of retail sales