Chinese law enforcement has confiscated $15 million in crypto and two supercars, a McLaren and a Ferrari worth around $2 million from a fraudulent cryptocurrency scheme connected to the sale of fake Huobi tokens.
Perpetrators have used Telegram to lure investors
According to a local July 9 report, the Chinese law enforcement authorities apprehended ten suspects linked to a fake cryptocurrency scheme. While revealing the case, the Chinese Ministry of Public Security, the country’s chief law enforcement, said that this case is the first in China where victims were reportedly scammed using smart contracts to create fake cryptocurrencies.
Through Telegram, the criminals approached victims and asked them for ETH, in return for the fake tokens at a bargain price. The cheap tokens led investors to fall into the fraudsters’ trap because they could make fast money by selling the tokens to the open market. More than 1,300 people were affected by the fraudulent crypto scheme the report says.
Moreover, the group apparently created several Telegram groups; the one called “Huobi Global Arbitrage HT Chinese Group,” in which they marketed a smart contract that could generate Huobi tokens; and offered an arbitrage plan to earn 8 percent returns.
A victim named Li, the first victim to report the scam explained to the police; “Simply put, you send one unit of ETH to a designated ETH address, you will receive 60 HT. And then you can sell it to gain the difference.” To his surprise, when Li transferred 10 Eth to the designated address; the 600 Huobi tokens he received in exchange were false.
Li realized that he could not sell or deposit fake tokens anywhere, thus reporting the fraudulent crypto scheme to the Chinese law enforcement authorities. In conclusion, the assets of the seized crypto include Bitcoin, Ether, and Tether. Confiscated physical assets include two luxury cars and a villa owned by the perpetrators.