2 Chinese OTC Traders Accused of Illicitly Raising Bitcoin by Promising Interest

Published at: May 22, 2019

Two Chinese over-the-counter (OTC) traders have been accused of running an illicit bitcoin (BTC) loan scheme and collecting bitcoin by promising interest on deposits, Chinese newspaper The Beijing News reports on May 22.

According to the article, Yi Zhou and Xiang Li convinced traders to send them their bitcoin holdings by promising them interest on their deposits, obtaining over 7,000 BTC (nearly $54.7 million at press time) from over 100 investors. The allegedly defrauded investors first started cultivating suspicions when the interest — which was paid in yen — stopped arriving on time in April.

The two individuals reportedly gained investors’ trust by operating chat groups on popular Chinese messaging app WeChat, where traders posted OTC offers for various cryptocurrencies. The outlet claims that police have started a criminal investigation against the duo and that they are now under arrest. It is reportedly currently unclear whether the two ran an unauthorized loan scheme or just defrauded the investors of their assets.

As Cointelegraph reported earlier this month, WeChat banned cryptocurrency transactions in its payments policy.

Yesterday, the CEO of Digital Currency Group suggested that the recent rise in bitcoin’s price could be linked to the trade war between China and the United States.

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