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Police in China have busted a Filecoin mining scam and seized digital currencies worth $62 million. According to local reports, the authorities arrested 31 alleged scammers and seized Ether, Filecoin, and local token Teda in the operation that spanned several cities, including Shanghai and Shenzhen.

Chinese authorities confirmed that the Fengxian County Bureau had arrested 31 members of the IPFSUnion Star Alliance. Based in Shanghai, the alliance is a leading blockchain player in China with Alibaba, Microsoft, and Huawei as some of its core members. It announced in April that it was putting up $1.3 billion to build the world’s largest Filecoin mining facility.

In a press release, the authorities confirmed they had seized 400 million yuan ($62 million) in ETH, FIL, and Teda coins from the scammers. They had cracked down on the scam in a number of major cities, including Shanghai, Shenzhen, Wuhan, and Xuzhou. The police said that the scammers were involved in some sort of multi-level marketing scam, but the details are still scant.

IPFSUnion denied the claims that its employees were involved in the scam. According to Chinese digital currency journalist Wu Blockchain, the reason IPFSUnion employees have been entangled in the scam is that “the suspect used suspected illegal funds to purchase, and therefore [the employees] assisted in the investigation. At present, most members have resumed normal work and will resume services after the assistance investigation is completed.”

The authorities have yet to clear up if IPFSUnion is directly involved in the scam.

This is just the latest in a line of Filecoin-related scams in China. Since its $200 million token sale, the project has gained popularity in China and scammers have been at hand to exploit this. In 2019, one scammer allegedly managed to con $300 million from Chinese investors by selling fake miners to thousands.

Watch: CoinGeek New York presentation, BSV Blockchain in China

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