ACE, one of the three major cryptocurrency exchanges in Taiwan, has been facing difficulties in its operations due to the involvement of its CEO, Wang Chenhuan, in a scam related to garbage currencies, leading to his detention. In order to resolve the issues with business operations and salary payments, the CEO, Wang Haoxu, recently applied to the court for the appointment of a temporary administrator. However, the court rejected the application as the problems raised did not meet the legal criteria for board dysfunction, and the issue of salary payments could be handled by the company itself.
Earlier this year in January, ACE, a Taiwanese cryptocurrency exchange, was hit by a scandal involving garbage currency fraud. Currently, a total of 11 individuals, including the co-founder and former chairman of ACE, Pan Yizhang, and the current CEO, Wang Chenhuan, have been detained and are prohibited from meeting anyone.
According to recent reports in the cryptocurrency community, the court has rejected the application made by ACE’s CEO, Wang Haoxu, to appoint a temporary administrator for ACE. This news has sparked rumors within the cryptocurrency community that ACE is facing significant challenges in its operations.
According to the court’s judgment, Wang Chenhuan, the company’s CEO, is the sole director and holds all the shares. His detention has resulted in the inability of the company to operate normally. The reasons cited by CEO Wang Haoxu in his application for the appointment of a temporary administrator include the company’s inability to make decisions, difficulties in obtaining external signatures, business disruptions, inability to transfer funds in and out of banks, and inability to pay employee salaries, system costs, and operating expenses.
This application was eventually rejected by the Taipei District Court. The court stated that the appointment of a temporary administrator is based on the condition of “board dysfunction” causing damage to the company’s operations and affecting shareholders’ rights. There must be specific matters that are urgent and require the personal handling of the directors in order to justify the appointment of a temporary administrator.
The reasons for the court’s rejection involve several points. Firstly, the financial problems raised by Wang Haoxu did not meet the threshold requiring board approval (above NT$300,000), and there were no concerns about the company’s daily operations. Secondly, Wang Haoxu, as the CEO, claimed to have been handling the monthly salaries and bonuses of over NT$2 million and had been signing off on them.
Lastly, the court explained that Wang Haoxu’s reasons for the salary issues were that the employee salaries were derived from transaction fees, but due to the involvement of the company’s CEO, Wang Chenhuan, in a criminal case, the cooperating bank (Cathay United Bank) expressed concerns about the source of the transaction fees, which restricted fund transfers and led to the delay in salary payments. This situation indicates that if there are salary payment issues at ACE, they are primarily caused by the bank’s concerns about the source of transaction fees and not due to board dysfunction. There is no direct correlation between the board’s ability to exercise its powers and the salary payment issue.
In summary, although the company’s CEO, Wang Chenhuan, has been detained, Wang Haoxu failed to prove that ACE’s physical operations were unable to continue or affected. Therefore, the court deemed it unnecessary to appoint a temporary administrator, as it does not align with the intention of the Company Law.
Furthermore, the court’s judgment explicitly states that it is aware that Cathay United Bank has frozen ACE’s funds, which are the transaction fee revenues. The users’ entrusted funds should be held separately and should be safe. However, if users are concerned about the safety of their assets, they can consider transferring or withdrawing their funds to reduce risks.
Due to conflicting statements from different parts of the cryptocurrency community, Dapp.com approached ACE to inquire about the situation mentioned in the initial application, such as the inability to make decisions, difficulties in obtaining external signatures, business disruptions, inability to transfer funds in and out of banks, and inability to pay employee salaries, system costs, and operating expenses. ACE responded that the company’s internal finances and operations are normal, and the application was made solely to exercise rights and protect the interests of users and employees, unrelated to the company’s financial condition.
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– ACE’s Detained CEO Wang Chenhuan Allegedly Assisted in Money Laundering with “Thai Treasury” and Large Amounts of Stolen Money Hidden in Yilan Buddhist Temple
– Detainees at Detention Center Enjoy Lavish Chinese New Year Feast! ACE Exchange’s Wang Chenhuan, Pan Yizhang, and Fraud Mastermind Lin Genghong’s Current Situation: Daily Outdoor Time and Video Games Available.