Shaanxi Police Captures 4 Crypto Fraud Suspects Despite China’s Ban
Despite China's rigorous clampdown on virtual currencies, crypto investment scams continue to surface, exemplified by a recent bust in Shaanxi province.
On July 31, local news agency Baidu reported that law enforcement authorities had successfully dismantled a fraudulent crypto scheme, leading to the arrest of four suspects.
The crackdown highlights the persistent vulnerability to crypto fraud even in one of the world's most restrictive jurisdictions.
China's Crypto Scam ArrestsThe victim referred to as Wang, fell prey to the scam to which he lost 410,000 Chinese yuan ($56,800). The fraudsters lured Wang into the investment through an online application promoted by individuals he met.
The scammers had convinced him they possessed a system loophole to ensure guaranteed crypto investment profits.
Wang filed a complaint with the local police on July 16, detailing his significant financial loss. In response, the Criminal Investigation Bureau launched a thorough investigation.
Their dedicated efforts, which included multiple visits and detailed inquiries, eventually led them to identify and apprehend the suspects.
On July 23, the police department captured Li and Zhai in Zhengzhou City. Just two days later, Wang and Li were also put behind bars in Kaifeng City, Henan Province.
Meanwhile, China has maintained a stringent stance on digital assets, implementing multiple bans on activities such as trading and mining.
The State Grid Corporation of China has issued a notice to all parts of the country requesting the closure of virtual currency mining. At present, some provinces with insufficient power in China, such as Henan and Anhui, have also begun to implement it. pic.twitter.com/kgDY1msDQ5
- Wu Blockchain (@WuBlockchain) July 14, 2021
The 2021 ban, currently the latest in the country, declared almost all crypto transactions illegal. Despite these measures, cryptocurrency is still legally recognized as virtual property under Chinese law, offering some protection to local crypto investors.
This legal nuance highlights the complex relationship between the government's regulatory actions and individual rights.
Fraudulent Cases in ChinaMoreover, Chinese authorities have been relentless in their pursuit of illegal crypto activities. This vigilance is evident from numerous crackdowns on illicit operations.
In a notable case from December 2023, the Chinese State Administration of Foreign Exchange exposed an underground banking network using cryptocurrency for illegal exchange services.
This extensive scheme, operating across 17 provinces with over 1,000 bank accounts, facilitated the transfer of over 15.8 billion yuan ($2.2 billion). The culprits performed this transaction to acquire virtual assets on international exchanges and offer yuan exchange services domestically.
Meanwhile, an April 2024 report revealed that several Chinese citizens who fell victim to a massive investment fraud had requested action from the Chinese government.
Chinese fraud victims seek return of 3bn in bitcoin seized in UK https://t.co/2llsTTBAYM
- Financial Times (@FT) April 11, 2024
They urged the government to negotiate with the UK for the return of over 3 billion in Bitcoin seized in the country. Tianjin Lantian Gerui Electronic Technology, a Chinese company involved in a 5 billion scam, defrauded the victims.
At the time, a representative group for the victims submitted a letter to Beijing's foreign ministry. In the letter's context, they requested official discussions with the UK government to reclaim the Bitcoin purchased with their lost funds.
This appeal comes after a conviction at Southwark Crown Court. In March, the court found Jian Wen, a British-Chinese woman, guilty of assisting her employer, Zhimin Qian, in converting some of the stolen Bitcoin into jewelry, cash, and real estate.
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