Chinese Police Nab 12 for Scamming OTC Crypto Investors

The fraudsters defrauded investors for millions in local fiat.

The Chinese law enforcement has busted a major racket of crypto fraudsters, arresting 12 people impersonating as fake Huobi exchange officials.

According to the local media outlet Jinse, all the arrests were made on Wednesday from the Guangdong province.

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The police found their involvement in defrauding crypto investors for millions of Chinese yuan.

The report detailed that the accused started to infiltrate WeChat crypto trading groups from November 2019 and was offering lucrative schemes to the traders. The fake schemes even offered the investors a chance to double their investments.

These fraudsters persuaded crypto investors to invest in fake over-the-counter (OTC) desks and the amount was then used for money laundering activities and transferred to overseas accounts.

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Showing impressive gains to lure investors

One unnamed victim testified that he first invested RMB 100,000 (around $14,000) to the fake schemes and was shown “considerable earnings” on record. He was then persuaded to invest another RMB 3.1 million (little over $436,000), depositing them into various fake accounts.

Though the victims first lured the investors showing fake returns, in February they sent notices to the investors that the investment project “had cracked up” and the money was lost.

According to the Chinese police, the fraudsters diverted the ill-gotten money through various bank accounts to foreign countries.

They have seized computers, mobile phones, bank cards, and other items related to the fraud case.

Cryptocurrency related scams are very common all around the world and victims are being targeted by many tactics.

With the COVID-19 outbreak, many major regulators and local authorities warned citizens against rising crypto extortion scams leveraging their fear of the Coronavirus.

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