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Chinese Prosecutors Close Net on 40 Suspected Crypto Scammers

Tim Alper
Last updated: | 1 min read
An image showing a judge’s gavel against the backdrop of a Chinese flag.
Source: Hakan/Adobe

Up to 40 suspected crypto scammers are facing prosecution in China – with 10 already standing trial.

Per Jimu News, 10 of the alleged scammers are being tried at the Enshi (Hubei Province) branch of the People’s Court on fraud charges.

The public prosecution agency claims that the “gang” of alleged fraudsters was active from 2020 to 2021.

The agency claimed that the gang’s masterminds were surnamed Ma and Xie. The court heard that the duo “set up” a bogus crypto trading platform named FXcoin, using “high leverage rates” and “high returns” as “bait.”

The gang allegedly told victims they could expect huge returns by “buying” bitcoin (BTC) “highs and lows.”

The court also heard that victims were strung along by the gang, who paid out “small rebates” to “trick victims into increasing the size of their stakes.”

Chinese Prosecutors: Group of 40 ‘Crypto Scammers’ Split into ‘Sub-units’

Prosecutors added that the gang was divided into three “sub-units.” They said these eventually began operating independently of one another. Collectively, the subunits accrued a total of around $1.5 million from their victims, prosecutors claimed.

The group’s victims were mainly China-based, but some overseas investors also appear to have fallen for the alleged scam. The court heard that victims included individuals based in Hainan, Jiangxi Province, the Xishuangbanna Dai Autonomous Prefecture, and Myanmar.

Prosecutors provided evidence to back up their claims, including group chats from the chat app platform WeChat. The group also appears to have made use of websites and bogus apps that were designed to look like bona fide crypto trading platforms.

The group, for example, allegedly created fake sites designed to resemble the Latin American trading platform Buda and the Japanese crypto exchange Zaif.

The three “sub-units” are being tried separately, the media outlet noted, “due to the large number of people involved” and “the complexity of the case.”

Late last year, police in Tongliao, Inner Mongolia, arrested 63 people on suspicion of laundering $1.72 billion worth of cryptoassets.