Local authorities in China have continued to target crypto scams in the country. The Chinese police have infiltrated a massive crypto ponzi scheme, arresting several suspects and confiscating digital assets.
Multi-million dollar crypto scam busted in China
Xinhua News Agency, a local news outlet, reports that the online pyramid scheme which was called “Ripple UnionPay Community,” operated through a mobile app with the same name.
The police first got wind of the app last year when the Economic Crime Investigation Team of the Pingchuan Branch of the Baiyin City Public Security Bureau.
The police claim the app lured in users with the promise of earning XRP, the native token of the Ripple blockchain, by becoming a member. The scam also promised that users could earn community promotion awards, community operation awards, performance awards, among other rewards.
The scammers also contacted new members through social media platforms like QQ and WeChat. At the time of the crackdown, the police reported that the platform had over 47,000 members across more than 30 Chinese provinces.
The police in the Pingchuan Branch of the Public Security Bureau of Baiyin City, Gansu province arrested seven suspects and recovered more than 8 million XRP worth about 126 million yuan (over $19 million). Computers, mobile phones, and other items involved in the case were also seized.
China is leaving no stone unturned in its crypto crackdown
Chinese authorities and regulators have been massively enforcing the country’s declaration of crypto trading and mining as illegal. In the past month alone, several actions have been taken to make owning and trading digital assets more difficult.
The Chinese Supreme Court has included crypto transactions in the judicial interpretation of illegal ways to raise funds. The government has also dashed speculations that a recently introduced electricity tariff hike for crypto miners could mean that crypto was still legal. It clarified that the law was put in place to make sure there was punishment for illegal crypto mining operators.
The crackdowns have hit the crypto industry in China hard. Speaking with CNBC recently, Du Jun, co-founder of Huobi, said the crypto exchange’s exit from China cost the company 30% of its revenue.