Chinese government officials do not take kindly to Bitcoin traders. This is especially true when scamming other users through cryptocurrencies. Six individuals have been arrested regarding a $48m scam which effectively defrauded more than 3,000 people. Shenzhen Puyin Blockchain Group had little to no honest intentions despite issuing a backed token.
It is evident cryptocurrency scams remain a big problem. In China, Shenzhen Puyin blockchain Group did exactly that. The venture raised $48m from investors for its new tea token. Apparently, this token was allegedly backed by the Pu’er tea, which is of high value in the Yunnan province. Unfortunately, this was a completely made up story, as there was no valuable digital token whatsoever.
Another Cryptocurrency Scam Uncovered
With the value of Pu’er tea rising rather regularly, these tokens were quite appealing. Investors were hoping for a lucrative venture, but they eventually lost their money. Over 3,000 investors have been defrauded in the process. Six individuals are now in custody of the Shenzhen police. It is unclear what will happen to them moving forward.
The massive marketing campaign launched by this scam may have been their undoing. More specifically, they organized roadshows and investment forums to gain more publicity. Such efforts are usually only associated with Ponzi schemes and other types of scams. In this case, it was another ICO scam waiting to implode. With nearly $50m in tokens sold, the venture has proven to be rather lucrative.
Additionally, the six individuals face another charge. More specifically, they are charged with manipulating the token price by buying their own tokens. As such, the value of their native token surged to $1.57. It is evident bringing this scheme to a halt is the only course of action. Scammers need to be weeded out sooner rather than later.
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