Police in China have arrested a group of fraudsters who launched a digital currency scam in a bid to recover the money they allegedly lost to a similar scheme.
According to local reports, the scam all started with Yang, an investor based in Juangsu province. Excited by the opportunities presented by digital currencies, he invested 100,000 yuan ($14,300) in a company that turned out to be a scam. To recoup his loss, Yang reportedly tried to scam other unsuspecting victims.
Yang allegedly linked up with two other investors who had also fallen victim to digital currency scams, authorities said. The two reportedly created Baiye Chain, a mobile app that they touted to be involved in block reward mining. Despite the claims of very high returns on investment through the Baiye Chain tokens, police said the project was a sham with no utility.
The group’s marketing efforts resulted in bringing in at least 20 members from three Chinese cities, authorities said.
In April 2020, some of the members reported Yang and his gang to the authorities, leading to their arrest. After investigations, the police discovered that all the investment was channeled towards personal accounts belonging to Yang and his group. The police managed to seize all the equipment the scammers used as well.
As per the report, Yang and his gang had made over 300,000 yuan ($42,960) before they were arrested.
Despite the Chinese government’s anti-digital currency stance, the country is home to several digital currency scams. Just recently, Chinese police arrested 109 people connected to the mega scam PlusToken. Though based in South Korea, PlusToken targeted Chinese investors with promises of high returns. The scam made off with over $3 billion in an exit scam in 2019.
In May, yet another scam known as WoToken is alleged to have bilked over $1 billion from over 700,000 investors. The scam promised investors it would double their investment, with extra income if they referred their friends. However, authorities brought the scam to a stop, arresting the six people behind it.
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