Chinese Traders Accused Of Raising $56 Million In Bitcoin By Promising Returns To Investors

Chinese Traders Accused Of Raising $56 Million In Bitcoin By Promising Returns To Investors

Two OTC market makers in China have been accused of gathering funds from investors in order to create a fraudulent loan scheme. The collected Bitcoin (BTC) is currently worth $56 million and came from 100 different OTC traders. The information was released by a recently released report from BJNews.

OTC Traders Conduct Fraudulent Scheme in China

According to the report released by BJNews, 20 OTC traders filed a complaint to police in Hangzhou explaining that two individuals called Yi Zhou and Xiang Li, were promising interest in their Bitcoin deposits.

The fraudsters were able to steal over 7,000 Bitcoin from more than 100 investors that believed they were going to be earning interest on their funds. At the same time, these two individuals gained the trust of the people using popular groups on the Chinese messaging app WeChat. In general, traders use these applications in order to post OTC offers.

These two individuals are now under criminal investigation started by police. At the moment, it is not clear whether they were running the investment scheme or they just were defrauding investors of their assets. Both suspects have now been arrested.

Dovey Wan, a founding partner at Primitive, said that the Chinese middle class is larger than the entire US population. Additionally, local fiat onramp is super fluid via OTC and wallet apps are “insanely good there.” She suggested that there is a large number of individuals purchasing Bitcoin.

That means that the alleged scammers had a large user base that they could gather funds from compared to other countries. Scammers are everywhere and users should take care of their digital assets.

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