Victims of crypto scam start their own scheme to recover losses

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Hottest New Crypto Listing On Major Exchanges

Victims of crypto scam start their own scheme to recover losses

By Benson Toti - min read

After being deceived by a crypto MLM scheme, a group of Chinese investors sought to recover with a scam of their own

Local Chinese authorities have reportedly arrested a group of scammers who created a fake cryptocurrency investment scheme, which was launched after they themselves were defrauded by a series of different crypto-related cons.

An article released by the Public Information Network Security Supervision Bureau on the WeChat platform revealed that an investor, who went by the name Yang, created a fake investment scheme after he lost over 100,000 yuan (approximately $14,000) to a cryptocurrency multi-level marketing scheme.

Yang , who is in his 40s, had teamed up with two other investors who had also been deceived by cryptocurrency scammers and launched a fake mobile app that offered a token called the “Baiye Chain”. According to the reports, their operation lured in more than 20 members from the Lianyungang, Yancheng, Huai’an, and other regions.

Yang’s scheme was quickly detected by the local authorities after investors who caught on the deception reported Baiye Chain to the police. After tracing and raiding the company’s office, the authorities arrested Yang and his companions, who had already reportedly been able to amass 300,000 yuan (nearly $43,000) in profits.

Work found that the app is linked to a third-party exchange. After the investment member’s funds entered the exchange, they did not make a relevant “blockchain” investment, but transferred the funds to a private account — the account holder was found to be Yang. The police handling the case followed the trail and quickly captured him.

The post also added that the police discovered an undisclosed tech company in the Henan Province had been complicit in helping Yang develop the Baiye Chain App, having known beforehand that its main purpose was to defraud others. The company had helped Yang and his accomplices make the mining virtual currency software.

With this information, the police also proceeded to arrest the main members of the company, who the article named Li and Hu, seizing their computers, as well as their mobile phones.

Cryptocurrency scams have intensified as China works to implement its central bank digital currency (CBDC) pilot tests across the country. A new scheme that fraudsters are using involves impersonating CBDC test groups, assuring others that they will get high returns with their initial investments. These initial investments generally start at around 10,000 yuan ($1,430).

At the end of the WeChat post, the cyber police urge readers to be strategic and wary of any cryptocurrency investments that are being offered to avoid falling victim to scams.