40b yuan Chinese crypto scam involving Malaysia, Cambodia cracked

Friday, July 31, 2020

China's Ministry of Public Security recently announced it cracked down a transnational internet pyramid scheme involving transactions of digital currencies such as bitcoin. It is the first known scheme of its kind and involved over 40 billion yuan in digital currencies, state media reported.

Authorities have detained 27 key suspects and a further 82 involved in the case. 

In May 2018, the suspects developed a platform, Plus Token, and relevant applications, claiming they could provide value-added services and high investment returns. 

Those interested in the platform were required to pay the equivalent of over US$500 in a digital currency to become a member and, depending on the value of digital currency contributed and the new "investors" the member recruits, they were rewarded with "plus" coins, an illegal digital currency developed by the platform itself, and rank of positions at the organization. 

The platform amassed more than 2 million members, collecting millions in digital currencies including bitcoin and Ethereum from its members, in total worth more than 40 billion yuan. Most incoming payments were redistributed to members who brought in new investors, while others went directly to the key suspects.  

A local public security bureau in Yancheng, in eastern Jiangsu province uncovered the case and reported it to the MPS at the beginning of 2019. Following an investigation, Chinese police in June 2019 traveled to countries including Malaysia, Vietnam, Cambodia and Vanuatu, cooperating with local police forces to arrest the 27 key suspects. 

In March 2020, Chinese police detained another 82 key members for suspected involvement in the pyramid scheme.