Scam alert! $20 million Chinese crypto startup faking its team
A Chinese crypto startup has been discovered to be using false information regarding its founders. The startup, known as BHB, has been using the photos of two university professors without their knowledge or consent. According to an investigation by CoinDesk, the two professors had no idea that the project even existed.
BHB has been in operation since December 2, 2018. In the short time it has existed, it has grabbed headlines several times with accusations of being a pyramid scheme. And in more ways than one, the criticism has been justified.
On its website, BHB has listed a number of its ‘founding team members.’ However, two of them have been fabricated, the report found. The first is Bobby White, an alleged financial engineer. The image used has been that of Alexander White, an associate professor of economics at the Tsinghua University. Then there’s Gregory Moss, an alleged product designer. The image used is that of a professor at the Chinese University of Hong Kong. The professor is also named Gregory Moss and majors in philosophy.
At press time, the website wasn’t working.
CoinDesk reached out to the two professors, and both denied any knowledge or involvement with the project. The use of their photos is fraudulent, they said, further stating that they were troubled by the incident.
The team members aren’t the only thing the BHB project has lied about. The phone number listed on its website has since been disconnected. The address to its New York headquarters is also non-existent (“22/121 Apple Street”).
And it continues. The BHB tokens can only be traded on XBTC.CX crypto exchange. However, the exchange seems to be part of the scam. For one, the BHB tokens can’t be mined. They are only acquired using the Chinese yen or the USDT tokens.
XBTC has also been handing out dividends to BHB users, issued in USDT. Users holding at least 700 BHB tokens for at least 24 hours were eligible. Initially, the dividends stood at 7 percent, but the exchange later revised it to 1.3 percent.
The model worked, with the project raising more than $20 million in the three months it has existed. According to XBTC, more than $21 million worth of BHB tokens changes hands every day on its platform.
And then it gets more interesting. Users who recruited new users were rewarded if their recruits bought BHB tokens and held them for at least 24 hours. If a recruit held at least 700 BHB tokens, the user received 1.5 percent of the sum. The exchange released rewards daily.
The model is characteristic of a pyramid scheme. In such schemes, the operator uses money paid by users in the lower levels to pay those in the upper levels. China outlawed pyramid schemes in 2005 following a worrying rise in the country. In some cases, perpetrators of pyramid schemes are sentenced to death.
And then the final piece of the puzzle: Renbing Li. The 24-year-old entrepreneur is the founder of venture capital firm, MoCapital. In a BHB gala on January 25, he referred to himself as the founder of BHB. Speaking to CoinDesk, he also defended the project, saying it aims to liberalize communities. MoCapital is also one of the principal investors in XBTC.CX crypto exchange.
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