China's biggest crypto scammers: History of deception and lessons for investors
China's cryptocurrency market attracted attention not only from investors and developers, but also from fraudsters who used this market to conduct the largest financial deception schemes. Despite the active development of cryptocurrencies and blockchain technologies, China faced a number of large cryptocurrency frauds, when fraudsters were able to deceive thousands of investors and withdraw huge amounts. In this article, we look at China's most high-profile crypto scam cases, their schemes, and the lessons that can be learned from these stories to avoid similar mistakes in the future.
1. BitPetite scheme: Cryptocurrency mining fraud
One of the biggest fraud cases in the Chinese cryptocurrency industry has been linked to the BitPetite project. In 2018, a group of fraudsters launched a cryptocurrency project, promising investors high returns from mining bitcoin and other cryptocurrencies. They have attracted a host of Chinese investors, offering them "guaranteed" profits from cryptocurrency mining.
However, as it turned out later, BitPetite did not conduct real cryptocurrency mining. Instead, investor funds were used to pay dividends to old users, creating the illusion of a mining farm. Ultimately, the project went bankrupt, and more than 50,000 Chinese investors lost their money.
2. PlusToken pyramid scheme: One of the biggest cryptocurrency hoaxes
One of the most famous and large-scale cryptocurrency frauds in China was the PlusToken scheme. Launched in 2018, this platform promised users high returns through investments in cryptocurrency and mining. A variety of schemes were presented on the platform, including investment plans that promised up to 300% of profits per year.
Hundreds of thousands of investors across China believed PlusToken's promises by investing billions of yuan. However, as with other similar schemes, new entrants' money was used to pay income to earlier investors and no real activity was carried out. In 2020, it was revealed that fraudsters stole more than $5 billion in cryptocurrency, making PlusToken one of the largest Ponzi schemes in cryptocurrency history.
After the platform closed and became the subject of an investigation, the Chinese authorities arrested many key participants in this scheme, but many of them still remain at large, and in search of other fraudsters do not stop.
3. WoToken founders detention: Millions of dollars fraud
Another high-profile case was fraud related to the WoToken platform, which functioned as an investment platform offering high returns from cryptocurrency assets. The platform promised users a steady profit, using their cryptocurrencies to "invest" in various altcoins. However, as it turned out later, WoToken used a typical Ponzi scheme, where new investor money was used to pay off profits to previous ones.
As a result of large-scale investigations, it was found that fraudsters managed to collect more than $1.1 billion from investors, and in 2018 the Chinese authorities detained several key figures in this scheme. Despite the detentions, many victims did not manage to return their funds.
4. WoToken scheme: The secrets behind the success of Chinese fraudsters
What unites all these schemes? Firstly, they actively used the popularity of cryptocurrencies to attract investors, and secondly, each of them promised incredibly high returns, which should always be an alarming signal for potential investors. Similar schemes promise "guaranteed profits," a clear sign of fraud. Such projects create the illusion of stability and profitability, using the money of new participants to pay old ones.
5. How to avoid falling into the hands of crypto scammers?
5.1. Check your project's reputation
Before investing in any cryptocurrency project, be sure to explore its reputation. Look for independent reviews, read reviews and follow the many forums where crypto enthusiasts and investors share experiences.
5.2. Fear Too Attractive Offers
If an investment opportunity looks too good to be true, it is most likely a fraud. High returns without risk are always a red flag.
5.3. Use only validated platforms
It is worth investing only on large, licensed cryptocurrency exchanges with a good reputation, such as Binance, Huobi, OKEx and other large sites that have passed security audits.
5.4. Understand the project
Do not invest in projects that cannot provide transparent information about their activities, team and technologies. Legal cryptocurrency projects are always open to users and are ready to provide all the necessary data.
6. Conclusion
Cryptocurrency scams in China and around the world are a real threat to investors. Unfortunately, fraudsters continue to use people's naivety to make big profits. However, by following basic safety rules and checking projects at all stages, you can reduce risks and avoid falling into the trap of swindlers. It is important to remember that in the world of cryptocurrencies, everything that promises "guaranteed" and high incomes should always be suspicious.
China's cryptocurrency market attracted attention not only from investors and developers, but also from fraudsters who used this market to conduct the largest financial deception schemes. Despite the active development of cryptocurrencies and blockchain technologies, China faced a number of large cryptocurrency frauds, when fraudsters were able to deceive thousands of investors and withdraw huge amounts. In this article, we look at China's most high-profile crypto scam cases, their schemes, and the lessons that can be learned from these stories to avoid similar mistakes in the future.
1. BitPetite scheme: Cryptocurrency mining fraud
One of the biggest fraud cases in the Chinese cryptocurrency industry has been linked to the BitPetite project. In 2018, a group of fraudsters launched a cryptocurrency project, promising investors high returns from mining bitcoin and other cryptocurrencies. They have attracted a host of Chinese investors, offering them "guaranteed" profits from cryptocurrency mining.
However, as it turned out later, BitPetite did not conduct real cryptocurrency mining. Instead, investor funds were used to pay dividends to old users, creating the illusion of a mining farm. Ultimately, the project went bankrupt, and more than 50,000 Chinese investors lost their money.
2. PlusToken pyramid scheme: One of the biggest cryptocurrency hoaxes
One of the most famous and large-scale cryptocurrency frauds in China was the PlusToken scheme. Launched in 2018, this platform promised users high returns through investments in cryptocurrency and mining. A variety of schemes were presented on the platform, including investment plans that promised up to 300% of profits per year.
Hundreds of thousands of investors across China believed PlusToken's promises by investing billions of yuan. However, as with other similar schemes, new entrants' money was used to pay income to earlier investors and no real activity was carried out. In 2020, it was revealed that fraudsters stole more than $5 billion in cryptocurrency, making PlusToken one of the largest Ponzi schemes in cryptocurrency history.
After the platform closed and became the subject of an investigation, the Chinese authorities arrested many key participants in this scheme, but many of them still remain at large, and in search of other fraudsters do not stop.
3. WoToken founders detention: Millions of dollars fraud
Another high-profile case was fraud related to the WoToken platform, which functioned as an investment platform offering high returns from cryptocurrency assets. The platform promised users a steady profit, using their cryptocurrencies to "invest" in various altcoins. However, as it turned out later, WoToken used a typical Ponzi scheme, where new investor money was used to pay off profits to previous ones.
As a result of large-scale investigations, it was found that fraudsters managed to collect more than $1.1 billion from investors, and in 2018 the Chinese authorities detained several key figures in this scheme. Despite the detentions, many victims did not manage to return their funds.
4. WoToken scheme: The secrets behind the success of Chinese fraudsters
What unites all these schemes? Firstly, they actively used the popularity of cryptocurrencies to attract investors, and secondly, each of them promised incredibly high returns, which should always be an alarming signal for potential investors. Similar schemes promise "guaranteed profits," a clear sign of fraud. Such projects create the illusion of stability and profitability, using the money of new participants to pay old ones.
5. How to avoid falling into the hands of crypto scammers?
5.1. Check your project's reputation
Before investing in any cryptocurrency project, be sure to explore its reputation. Look for independent reviews, read reviews and follow the many forums where crypto enthusiasts and investors share experiences.
5.2. Fear Too Attractive Offers
If an investment opportunity looks too good to be true, it is most likely a fraud. High returns without risk are always a red flag.
5.3. Use only validated platforms
It is worth investing only on large, licensed cryptocurrency exchanges with a good reputation, such as Binance, Huobi, OKEx and other large sites that have passed security audits.
5.4. Understand the project
Do not invest in projects that cannot provide transparent information about their activities, team and technologies. Legal cryptocurrency projects are always open to users and are ready to provide all the necessary data.
6. Conclusion
Cryptocurrency scams in China and around the world are a real threat to investors. Unfortunately, fraudsters continue to use people's naivety to make big profits. However, by following basic safety rules and checking projects at all stages, you can reduce risks and avoid falling into the trap of swindlers. It is important to remember that in the world of cryptocurrencies, everything that promises "guaranteed" and high incomes should always be suspicious.