Mainland China, one of the world’s most restrictive jurisdictions to cryptocurrencies like Bitcoin (BTC), is still vulnerable to crypto investment scams despite its crypto ban.
Law enforcement in the Chinese province of Shaanxi has cracked a crypto fraud scheme, arresting four suspects, local news agency Baidu reported on July 31.
The suspects reportedly defrauded the victim — who is referred to as Wang in the report — of 410,000 Chinese yuan ($56,800).
First suspects arrested a week after victim filed complaint
The scam’s victim went to the local police on July 16, filing a complaint about losing 410,000 RMB by investing in cryptocurrency online.
Wang said he was lured into investing in crypto through an application by individuals he met online. The fraudsters reportedly claimed they knew a system loophole allowing one to get guaranteed crypto profits.
Following the complaint, the Criminal Investigation Bureau subsequently launched an investigation into the case, managing to identify the suspects through several visits and investigations.
On July 23, the police arrested the suspects Zhai and Li in Zhengzhou City, Henan Province. On July 25, the suspects Wang and Li were arrested in Kaifeng City, Henan Province.
The four suspects are now criminally detained on fraud charges, and the case is under further investigation.
China crypto crackdown continues
Mainland China has emerged as one of the world’s most skeptical countries to cryptocurrency, enforcing multiple bans on various crypto activities, including trading and mining.
China’s latest Bitcoin ban, enforced in 2021, affected virtually all cryptocurrency transactions. Local authorities announced an interdepartmental crackdown on crypto.
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However, the Chinese government still allows one to hold cryptocurrency and protects local crypto investors as crypto is recognized as virtual property protected by the law.
Chinese law enforcement has been actively cracking down on illegal crypto-related activity, with local police regularly uncovering such operations.
In December 2023, the Chinese State Administration of Foreign Exchange busted an underground bank that used crypto to offer illegal exchange services. The scheme, which had over 1,000 bank accounts in 17 provinces, moved over 15.8 billion yuan ($2.2 billion) to purchase crypto on exchanges overseas and provide yuan exchanging services.
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