Police in Malaysia have arrested 14 Chinese men accused of orchestrating a digital currency scam. The men allegedly targeted victims from China, posing as successful investors. They face up to 10 years behind bars for their crimes.
The 14 were arrested in Horizon Hills, a township in Malaysia, after two months of surveillance by the police, a report by local outlet The Star revealed. Upon arresting them, the police revealed that they are aged between 20 and 30. Three of the suspects didn’t have valid travel documents.
The men have allegedly been targeting Chinese investors, the police claimed, adding, “One of them would pose as a successful investor or a mentor while the rest will pose as investors before creating a group chat through WeChat and QQ application for each of their victims. All of the suspects would then give a fake testimony to persuade the victim into investing.”
The scam has been ongoing for the past two months, but the extent of the damage is still unknown. The case is being investigated under the Penal Code and if found guilty, the suspects face 10 years in jail, a fine and caning. The three who had no valid travel documents are being investigated under the Immigration Act and could face five years in jail, a $2,290 fine and up to six strokes of the cane if convicted.
While China has banned the use of digital currencies, this has done little to curb scams in the industry. The largest one yet is PlusToken which targeted Chinese and Korean investors. The scam made off with $3 billion and till date, authorities are still going after the culprits. Recently, authorities revealed that scammers were affiliating themselves with the Olympics to defraud their investors. They claimed to be using blockchain to invest in activities related to the Olympics.
Other major scams include the $290 million mining scam where investors bought non-functioning mining rigs and the Qubu fitness app which attracted 95 million users with promises of 37% returns in two months.
On its part, Malaysia has made efforts to regulate the digital currency industry. In its latest efforts, the Securities Commission of Malaysia published its regulations for the industry in January. The regulations capped token sales at $24.5 million, but allowed any investors, institutional or retail to participate. Only firms registered in Malaysia can issue tokens, and they must seek the regulator’s approval beforehand.
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