Four Chinese nationals are set to spend up to nine years in prison in connection with their involvement in a mega cryptocurrency scam. The four were the alleged masterminds behind WoToken, a scam that defrauded $1.1 billion from over 700,000 Chinese citizens.
A court in the Chinese city of Yancheng has denied an appeal by the four, recently published court documents reveal. The four—Li Qibing, Gao Yudong, Tian Bo and Wang Xiaoying—will serve prison sentences ranging from 2.5 to 8.8 years.
The court further ordered law enforcement agencies to seize 425 million yuan ($63.6 million) worth of ill-gotten gains from the WoToken scam. This figure is, however, just a small portion of the funds they managed to steal from their investors, according to reports.
In its ruling, the court stated that the four operated the massive WoToken scam, touting it as a highly profitable trading platform. As CoinGeek reported, WoToken was launched three years ago by six people who claimed that their platform leveraged algorithmic trading bots to generate their investors huge profits. The investors could also earn passive income through referrals, the organizers reportedly said.
However, as hundreds of thousands came to realize too late, it was just another multi-level marketing Ponzi scheme. The trading platform and the algorithmic bots only existed on marketing materials. All the six fraudsters were doing is taking money from one investor to pay another.
Despite the obvious red flags, WoToken was able to gain quite a following. As per the court documents, the scam lured 715,249 Chinese investors who, altogether, invested about 7.7 billion yuan ($1.15 billion). Authorities were able to stop the scam in May this year and nab the key operators.
WoToken was quickly branded ‘PlusToken 2.0’ after the infamous digital currency scam that made away with over $3 billion from its investors. These comparisons were more apt than previously thought, with court documents later revealing that one of the key PlusToken operators was hugely involved in WoToken.
one the core criminal involved in WoToken is formerly key scammer from PlusToken …
— Dovey “Rug The Fiat” Wan🪐🦖 (@DoveyWan) May 16, 2020
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