Suspect Returned for $14M Crypto Scam

A suspect named Zhang has been extradited from Thailand to China for allegedly leading a $14 billion (100 billion yuan) crypto pyramid scheme. He is the first financial criminal extradited under the China-Thailand treaty since its inception in 1999.

China’s Ministry of Public Security announced that Chinese and Thai officials have created a special group called “Hunting Fox,” which facilitated Zhang’s extradition to China on Wednesday.

Suspected crypto scammer busted

Although the ministry only released his surname as Zhang, the South China Morning Post reported that the suspect’s name is Zhang Yufa, also known as Tedy Teow Wooi Huat, who happens to be the founder of MBI Group.

After an investigation, Teow is suspected of running a pyramid scheme that defrauded many people, mainly Chinese nationals, by encouraging them to buy MBI’s unauthorized crypto. Teow allegedly ran the MBI group starting in 2012, convincing investors to pay fees ranging from 700 yuan ($98) to 245,000 yuan ($34,300) for membership via crypto.

Authorities say the scheme attracted more than 10 million members with promises of significant returns.

It was authorities in southwest China’s Chongqing that began investigating Teow in late 2020, prompting China’s Interpol Bureau to issue an international arrest warrant for him months later . Thai police arrested Teow in July 2022 after he fled Malaysia.

Beijing then requested his extradition to China, a request that was approved by a Thai court in May and later confirmed by the Thai government. Malaysia also sought Teow’s deportation for fraud, but its appeal followed China’s.

The Chinese government has described Teow’s case as “extraordinary” and hopes his extradition will set a precedent for future extradition cooperation between China and other nations.

China steps up crypto crackdown

China has enforced strict regulations against crypto speculation since 2017, increasing its crackdown in 2021. This eventually led to the relocation of mining operations as well as crypto exchanges such as Binance.

The government restricts crypto-related activities, banning financial firms from processing crypto payments and limiting startups from using blockchains to raise funds. Despite these controls, crypto trading remains widespread, and citizens find ways to circumvent the rules.

The Supreme People’s Court and the Supreme People’s Procuratorate officially recognized transactions in virtual assets, including those conducted through crypto exchanges, as a form of money laundering. This is the first time China has specifically targeted this asset class in this way. The new rules are part of a broader crackdown on money laundering, specifically targeting the use of cryptocurrencies in illegal activities.

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