Chinese Police Dismantle $14M Crypto Scam

The Chinese authorities dismantled a significant crypto-related scam in Wenzhou. The scheme amassed over 100 million yuan ($14.31 million), which was seized along with a number of luxury cars and villas.

According to Toutiao, the gang has been operating since 2019 and primarily sought out victims through Telegram chat groups, including one called “Huobi Global Moving Brick Arbitrage HT Chinese Group Community.”

ETH, BTC, and USDT stolen from victims

The report states the scammers pretended to be investors who had benefited from an “investment scheme.”

The scammers told their victims that all they had to do was send their cryptos to a fake Huobi wallet address, and the “investor” would receive a more substantial amount in Huobi Token (HT) in return. Instead, they received a fake HT link.

Mo Li, the head of marketing at HashKey Hub, said through a tweet that Chinese police had seized “tens of thousands” of Ether (ETH), Bitcoin (BTC), and Tether (USDT).

Promises broken

The scammers told their victims that the scheme would guarantee 8% in returns.

Local media outlets commented that the group was known to frequent bars and nightclubs, where they would spend their stolen money. The allegedly rented presidential suites in hotels when they traveled across China, and even rented out large office buildings to establish a headquarters for their illegal endeavors.

According to the local police, over 1,300 people reported being scammed by the scheme, as the investigation is still ongoing.

Chinese authorities also dismantled a group of alleged scammers on May 21, posing as Huobi exchange officials, who were operating an over-the-counter (OTC) website.

The police arrested 12 suspects in Guangdong province believed to be behind the scheme, after an investigation found that WeChat crypto trading groups had been infiltrated from November 2019.