According to local news reports, the Chinese police have arrested 12 people accused of operating a fake over-the-counter website and impersonating the officials from the crypto exchange Huobi. According to the report, the accused behind the crypto scam started to infiltrate WeChat crypto trading groups in November last year and were offering lucrative schemes to the traders. The fake schemes even offered the investors a chance to double their investments.
The alleged scammers used the OTC website for money laundering.
The fake schemes by these alleged scammers behind this crypto scam even offered the investors a chance to double their investments. The suspected fraudsters persuaded victims to invest in their OTC platform, which was used for money laundering. Later, the defrauded money was sent to overseas accounts. The scammers had posted about their good news foreign Bitcoin investment opportunity on the social media platform WeChat. According to a testimony of an anonymous victim, he transferred RMB 100,000 to the account advertised on the fake OTC platform.
The investment initially began to record “considerable earnings,” almost doubling the capital. The alleged fraudsters behind this crypto scam persuaded this victim to continue investing, and he eventually sent around RMB 3.1 million to different bank accounts.
Scammers diverted the money through various bank accounts after closure.
The victim who sent around 3.1 million RMB received a notice from the fake OTC platform in February informing him that the project “had cracked up” and therefore lost the money. The law enforcement authorities said that after this sudden closure of the fake OTC platform, the criminals diverted the money through various bank accounts. The police said that they had seized computers, mobile phones, bank cards, and other items related to the case.
The scams related to cryptocurrency have increased as the crypto industry races towards mainstream adoption. Earlier, the FBI issued a warning against the potential surge of crypto-related scams in the time of the pandemic.