Taiwan arrests 15 over alleged cryptocurrency investment scam

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Cryptocurrencies are still proving rife for scamming opportunities. Fifteen suspects have been arrested by the New Taipei police for a multi-million dollar scam, reports Focus Taiwan.

The Criminal Investigation Bureau (CIB) made the announcement of the arrest on January 26. Li Chi-hsun, chief of the CIB’s 7th Investigation Corps, said their leader went by the name Lin. The group was caught in two raids, conducted on January 9 and 17.

Thirty victims were defrauded of NT$250 million (US$8.13 million) in an investment scam focused on the IBCoin cryptocurrency. Allegedly, Lin bought IBCoins from mainland China in 2017, and then recruited a team to help him sell them at an increased markup, promising big returns. To “prove” the investment was real, the team would post picture on Facebook of the high-life, including expensive cars, leading investors to believe they had bought them with earnings from IBcoins.

None of the investors ever saw profits from the scheme. The IBcoin is practically worthless, and the mark-up in price, ranging from a 30 to 60 time multiple of the actual cost of a single token, was solely to pad the fraudsters pockets.

Earlier this month, another group of Taiwanese scammers were official charged with breaking banking laws. That group promised investors a 355 percent return on their investment. That group operated from October 2016 until their arrested in June 2018. Investors stopped receiving returns as soon as the market turned sour in February of 2018.

Taiwan is looking at regulating their cryptocurrency industry better to protect against these types of scams in the future. In October, Wellington Koo, chairman of Taiwan’s Financial Supervisor Commission, promised that investing in initial coin offerings (ICO) would be easy and safe once his commission installed regulations for the activity.

That regulation will only cover ICOs for what could be considered securities. Taiwan will need to consider how it can better educate their citizens, or protect them, against scams going forward, or it will see more of this type of activity when the market improves.