Crypto scams Asia: In less than 24 hours, the governments of China and South Korea have dismantled two organized groups that were in charge of promoting pyramid schemes by using cryptocurrency investments as a background. This decision seems to further reinforce the firm position of both governments in the fight against the criminal use of blockchain technologies.
In recent months, with the rise in popularity of cryptocurrencies, scams, and pyramid schemes have increased notably in Asia, where the market has seen an even higher adoption rate than in the rest of the world.
Such is the importance of the Asian market that, for example, a few months ago South Korea was one of the best arbitrage opportunities for traders because the price of bitcoin in its exchanges and P2P markets was much higher than in the rest of the world. Also, when rumors were spread about the country’s policies against cryptos, the world’s markets crashed into a solid bearish run.
Asian Ponzi Scheme # 1: China’s 13M$ Datang-Coin
On April 19, Northwest China police reported the dismantling of an organized gang that engaged in a multimillion-dollar scam by deceiving investors with a non-existent Token.
They organized events in several cities such as Ningbo, eastern Zhejiang Province, and even as far as in Pnom Penh, Cambodia. However, the one that attracted the most attention was a massive event that they coordinated in the province of Xi’an, the “Global Blockchain Technology Development Forum” an event covered by the China Daily
To promote themselves they created a company: “Hong Kong Yongli Datang International Group” and hired a Caucasian-looking man for 30,000 Yuan to play the role of Evgeny Subbotin, their CEO.
They were in charge of promoting investment in their “DBTC” token, ensuring that for an investment of 480,000 US dollars, DBTC buyers could receive a daily income of 80,000 yuan (13,000 US dollars) thanks to the behavior of their cryptocurrency.
This allowed them to earn 13 million dollars in 18 days. When the police dismantled their main offices, the operation quickly spread to 31 provinces, resulting in the arrest of 9 individuals.
An image claiming to show the arrests.Courtesy: Huashang News
Asian Ponzi Scheme # 2: Korea’s 20M$ Hedge-Bitcoin
Approximately 24 hours after the arrests in China, South Korean authorities announced the closure of a two-person operation for running a multilevel business since 2015 that was in charge of promoting the purchase of a non-existent token. The names of the couple are not known as they are not published for legal reasons. However, the authorities stated that they are 51 and 62 years old.
On April 19, judge Hwang JinJin from Seoul’s Incheon District Court issued fined $15 million to the youngest person and $8 million to the other. The first one is listed as the intellectual author of the entire operation, which was based in the Philippines. The second individual who managed the investments and expenses ran away and currently has an arrest warrant from Interpol.
These types of scams have been widespread lately, tarnishing the image of cryptocurrency at the international level. The ground for a regulatory framework is not quite ready yet, but it is situations like this that make it possible for the authorities to uphold their strict positions. Nobody wants regulations until they’re the victims of a scam. In the meantime, it is always advisable to follow the famous tip that is repeated every day in crypto trading forums: “Don’t invest more than you can afford to lose,” especially when it seems too good to be true.