China: $15 million Ethereum scam ends in Ferrari showdown ๐จ This article is 4 years old...
China: $15 million Ethereum scam ends in Ferrari showdown
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Updated: Jul. 11, 2020 at 12:56 am UTC
Photo by Marc Kleen on Unsplash
A scam involving fake crypto exchange tokens, fast sports-cars, and mansions had all the ingredients of a Hollywood thrillerโminus the bad guys going scot-free in the end.
This week, authorities in China busted a local scheme perpetuated by college kids looking to make a quick buck; with the latter ending up making millions in the process.
Over 100 million yuan ($15 million at exchange rates) were seized from a group of crypto scammers on Thursday. The stash was mainly all ETH, BTC, and USDT, apart from sports cars and real estate worth millions of dollars.
The group was not even sophisticated. They altered the old โsend me 1 ETH and Iโll send 2 ETH backโ approachโswindling over 1,300 victims.
Fake Huobi tokensย
As per Toutiao, the group claimed to own a smart contract that generated Huobi Tokens (HT) issued by Huobi Globalโa very popular exchange in Southeast Asia. Gullible investors were promised returns of up to 8 percent per month if they paid some capital upfront.
The catch? The tokens were fakes.
Police told reporters the group asked victims to send 1 ETH to a certain address, receiving 60 HTs in return. These fake tokens were priced below what the real HT sells for on exchangesโallowing for a profit opportunity.
Li, a victimโbuying into the scheme to make quick profitsโsent 10 ETH to the scammersโ wallets, receiving 600 HT in return. The group operated on Telegram with the name “Huobi Global Moving Brick Arbitrage HT Chinese Group Community.โ
However, when he tried depositing/selling those, he quickly discovered they werenโt accepted by any ERC20 wallet. Needless to say, a complaint was soon filed.
Caught in a luxury villaย
Authorities led investigations for over a month. The culprits were ultimately caught; all their identities found as well. Police raids, later on, found they had already cashed out some of the ill-gotten gains for purchasing real estate, a Ferrari, and a McLaren.
Ten suspects were behind the scamโall residing in a posh property in the Cangshan District of Fuzhou City. The estate was worth a cool $1.5 million.
Police also found โdozens of laptops and mobile phonesโ used in connection with the online heist, apart from crypto wallets holding millions in the top-three cryptocurrencies.
The scammers did not deny their involvement. And as it turned out; they were all freshly graduated college students.
Three people were regarded as โmastermindsโ of the operation. They recruited seven individuals to make fake blockchain addresses, interact on the Telegram group, and handle any โcomplaints.โ
The group was active since mid-2019, said authorities. The case is ongoing in criminal courts.
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HTX Token(formerly HT or Huobi Token) is a decentralized digital asset based on Ethereum, with a limited total supply of 500 M, issued by Huobi Group.
Ethereum
$3,332.92
Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps).
HTX
Huobi, a virtual asset exchange, launched a revised branding strategy on September 13, 2023, where “Huobi” will be rebranded as “HTX.” “H” stands for Huobi, “T” represents TRON with a commitment to being all in TRON, and “X” stands for the exchange.