Virtual assets have grown in popularity, which has forced regulators to implement strict rules due to the rapidly increasing crypto scams.
The rise in digital currency use has exposed investors to fraud and deception, making government oversight essential for protecting public interest and restoring trust in virtual asset markets globally.
Chinese Court Convicts 34 In $64M Crypto Fraud
Having said that, the Ezhou Court recently concluded two significant virtual currency fraud cases in China. The case involved a fraud gang of thirty-four defendants using a new trading platform.
Nearly thirty thousand people were deceived, and fraudsters swindled a total of 460 million yuan.
Details of the Fraud
The defendants meticulously planned their scheme using a newly launched virtual currency trading platform. During the trial, some defendants claimed that it was a voluntary investment transaction. The fraudsters operated the OURBIT Digital Currency Trading Platform under pretenses and licenses.
The fraud gang falsely claimed the platform was registered in Singapore with international licenses. They promoted features like new stop-profit and stop-loss options with zero slippage.
The gang fabricated K-line charts and created the illusion of nine digital transactions. They aimed to develop a professional image that attracted many unsuspecting investors.
Also Read: Shanghai Court Declares Cryptocurrency Ownership Legal In China Amid Growing Global Acceptance
Fraudulent Tactics and Victim Impact
Fraudsters posed as investment teachers and actively joined WeChat groups to mislead victims. They frequently posted fake profit screenshots and arranged drag agreements for quick investment.
One victim, Liang, lost over three million yuan after initial minor profits turned into losses. Many victims later expressed regret, stating they would have avoided the closed betting platform.
Operation of the OURBIT Platform
The OURBIT platform was organized into departments such as product, business, and technology. The business department recruited first-level agents with high profit and risk-sharing models.
Upper-level agents then developed lower-level agents and established profit-sharing ratios carefully. Agents fabricated identities and sent fake profit screenshots to lure potential investors into trades.
The platform coordinated closely with its agents, ensuring the fraud scheme was effectively maintained.
Court Verdict and Sentencing
The court found defendant Cheng and 34 others guilty of committing fraud through false facts. Judges sentenced the accused to prison terms ranging from three to twelve years with fines.
The court tried the complex case separately due to the large number of people involved. All judgments are now in effect, and the verdicts have been publicly announced.
Regulatory Measures and Legal Outlook
China’s top legal authorities are increasing their focus on crypto-related legal cases amid strict bans. The heightened research aims to better understand and address virtual asset fraud within the country. Regulators hope that stricter policies will help reduce scams and protect honest investors.
The recent court rulings mark a strong step towards preventing future crypto fraud and scams. The verdicts provide a clear message that fraudulent schemes in virtual assets will face harsh penalties.
Authorities remain committed to enforcing strict regulations to secure public trust and market integrity. Legal reforms and active court decisions will shape the future of virtual asset regulation in China.
Also Read: China Unveils New Forex Rules, Asks Banks To Flag Risky Crypto Trades