Eight people arrested in China over cryptocurrency fraud case worth nearly $8 million

Chinese police arrested eight people and froze digital assets worth nearly 6 million yuan ($944,643 at current rate) in connection with fraud. This is reported by Nikkei Asia.

According to the Public Security Bureau of Chizhou, the victims of the rug pull scheme worth 50 million yuan ($7.9 million) were “hundreds of investors.” Its organisers moved the funds to an “anonymous pool” without user consent to launder money, the report says.

The investigation began in June 2021 after one victim reported a loss of 590,000 yuan. In December, police carried out a series of arrests, during which expensive cars and mansions worth tens of millions of yuan were seized from the suspects.

“The investigation concluded that this was a typical case of illicit acquisition of virtual currency using blockchain technology,” the police statement says.

Authorities did not specify the project’s name. Local media speculated that it referred to Gainswap.

According to the public security authorities in Chizhou, Anhui Province, the city police recently busted a case of illegally obtaining virtual currency data from a computer system using blockchain technology, with a value involved of about 50 million yuan. According to ChainCatcher, the involved project is suspected to be GainSwap, a DEX project in the Heco ecosystem. https://t.co/uhbxNSndKn pic.twitter.com/B6od9jbjTQ

— ChainCatcher 链捕手 (@ChainCatcher_) January 18, 2022

According to Chainalysis, in 2021 criminals stole from users more than $7.7 billion in cryptocurrencies. More than a third of this sum came from rug-pull schemes.

Earlier in December Hong Kong Customs arrested two suspects in laundering more than HK$380 million (US$48.7 million) through personal bank accounts and a cryptocurrency exchange.

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