Chinese police crack down on digital yuan fraud ring

Chinese police crack down on digital yuan fraud ring

The digital yuan has yet to launch officially, but fraudsters are already probing to find its weakness. In the latest case, Chinese authorities have arrested a suspect who allegedly tricked a victim into giving up her details which he used to open a digital yuan wallet. He then drained her account, but authorities managed to track down the flow of the funds.

The case happened in Gaoyou, a county-level city under the administration of Yangzhou, in the eastern province of Jiangsu. Local authorities received a report from a woman who claimed she had been defrauded through a well-orchestrated digital yuan scam, local news outlet Modern Express reports.

The woman had received a call from an unknown man who told her he was working with authorities. He told the victim that she had been involved in a fraud case which he was investigating. To help with the investigation, she was asked to provide her bank account details and later, the related verification codes.

The fraudster then set up a digital yuan wallet for the woman using the details and codes she gave him. He transferred 300,000 yuan ($47,000) from the victim’s bank account to the digital yuan wallet. He then moved the money into his own digital yuan wallet.

Police investigating the scam managed to follow the money as it flowed from the bank account and ended up in the scammer’s digital yuan wallet. They arrested the owner of the final wallet, surnamed Li, in the eastern province of Shandong. Authorities claimed that the scammer was part of a money laundering and fraud ring based overseas. They also seized $9,400 from the suspect, which they claim he had obtained illegally.

Two weeks ago, authorities in Xinmi city in Henan province arrested 11 suspects for yet another digital yuan-related fraud case. The suspects allegedly conducted their scam over the phone as well, tricking the victim into believing that he would get compensated for an online purchase that had a quality issue. They ended up siphoning over $31,000 from the victim’s bank account before they were arrested. The scammers were part of a larger crime ring based in Cambodia.

Watch: CoinGeek New York panel, Investigating Criminal Activity on the Blockchain

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