Examples of high-profile benches in the Chinese crypto market: How to avoid mistakes
China has become one of the largest players in the global cryptocurrency market, which attracted not only innovative companies and investors, but also fraudsters. In recent years, many large cryptocurrency benches have been recorded in China, which deceived thousands of people and led to losses of billions of dollars. The incidents were prime examples of fraudsters using cryptocurrencies to carry out financial pyramids and other fraudulent schemes. In this article, we will talk about the loudest skam schemes that shocked the Chinese crypto market, and give advice on how to avoid falling into such traps.
1. Scum PlusToken: One of the biggest cryptocurrency cheats in China
PlusToken is perhaps the most famous and largest cryptocurrency scam to be revealed in China in 2020. The project promised its users a high return on their investments in cryptocurrencies, claiming to use their funds for cryptocurrency mining and trading cryptocurrencies.
How the scheme worked:
- PlusToken attracted investors with promises of up to 300% per annum on invested cryptocurrencies. To increase profitability, users had to invite other people, which created a typical pyramidal scheme.
- Fraudsters promised automatic income from investments, and the funds of new participants went to payments to the old, creating the illusion of profitability.
- At some point, the number of new participants decreased, and the scheme collapsed. Around 2020, it became known that fraudsters stole more than $5 billion in cryptocurrencies.
What happened to the organizers:
After the scheme was revealed, Chinese authorities launched large-scale investigations and several key organizers were arrested. However, many of the money was lost and many investors were never able to recover their funds. PlusToken has become a symbol of how high returns and aggressive marketing can lead to huge losses.
2. WoToken scam: Another major cryptocurrency pyramid
WoToken is another prime example of the cryptocurrency pyramid that has been revealed in China. Around 2018, the scheme attracted investors with promises of high revenues from cryptocurrency assets. The project used a model similar to PlusToken, where users received interest on their investments and could receive bonuses for attracting new participants.
How the scheme worked:
- WoToken promised its users profits that were generated not through real investments or cryptocurrency assets, but by redistributing funds between participants.
- In fact, the project used the funds of new users to pay income to old investors, creating the illusion of profit.
- As with PlusToken, WoToken went bankrupt when the pyramid stopped generating revenue and the project was closed. More than $1.1 billion was stolen before authorities could intervene.
Implications for investors:
As with PlusToken, many investors trapped in WoToken have lost significant sums. The Chinese authorities made several arrests, and also initiated investigations into the organizers of the scheme. Despite this, many of those who invested in the project were never able to get their funds back.
3. BitPetite scam: False promises from mining projects
BitPetite is another controversial cryptocurrency project in China related to cryptocurrency mining. The project promised investors revenue from mining bitcoin and other cryptocurrencies, claiming to use innovative solutions to create and manage mining farms.
How the scheme worked:
- BitPetite has attracted investors by offering strong revenues from cryptocurrency mining. However, in fact, no mining operations were carried out.
- Investor funds were used to pay other participants in the scheme, creating the appearance of profitability. The project was heavily advertised through social media and other channels, which helped raise large sums.
- The project eventually went bankrupt and all funds were lost. Scammers disappeared with cryptocurrencies and user money.
Consequences:
As with other major benches, BitPetite defrauded thousands of investors, leaving them out of pocket. After the disclosure of the scheme, Chinese law enforcement agencies began an investigation, but many users who lost money were unable to return their funds.
4. How to avoid cryptocurrency benches in China?
4.1. Study the project and its team
Before investing in a cryptocurrency project, it is important to carefully study it. Note the team information, user feedback, and the existence of independent audits. Scammers often hide their identities or provide false information about themselves.
4.2. Caution with promises of high returns
If a project promises incredibly high returns with minimal risks, it should always be alarming. Promises of 100% profit or more are a clear sign that the project could be a pyramid scheme.
4.3. Using Proven Platforms
You should invest only in well-known and proven cryptocurrency exchanges with a good reputation. Using platforms that are not audited or licensed may result in losses.
4.4. Avoid aggressive referral programs
Fraudsters often use referral links and bonuses to attract new members to expand their scheme. Be careful with projects that actively encourage referrals and attracting new users.
5. Conclusion
Cryptocurrency scam schemes in China continue to be a major threat to investors. Projects like PlusToken, WoToken and BitPetite are prime examples of how fraudsters can use the popularity of cryptocurrencies to create financial pyramids and deceive thousands of people. It is important to be risk aware and always scrutinise projects before investing.
China has become one of the largest players in the global cryptocurrency market, which attracted not only innovative companies and investors, but also fraudsters. In recent years, many large cryptocurrency benches have been recorded in China, which deceived thousands of people and led to losses of billions of dollars. The incidents were prime examples of fraudsters using cryptocurrencies to carry out financial pyramids and other fraudulent schemes. In this article, we will talk about the loudest skam schemes that shocked the Chinese crypto market, and give advice on how to avoid falling into such traps.
1. Scum PlusToken: One of the biggest cryptocurrency cheats in China
PlusToken is perhaps the most famous and largest cryptocurrency scam to be revealed in China in 2020. The project promised its users a high return on their investments in cryptocurrencies, claiming to use their funds for cryptocurrency mining and trading cryptocurrencies.
How the scheme worked:
- PlusToken attracted investors with promises of up to 300% per annum on invested cryptocurrencies. To increase profitability, users had to invite other people, which created a typical pyramidal scheme.
- Fraudsters promised automatic income from investments, and the funds of new participants went to payments to the old, creating the illusion of profitability.
- At some point, the number of new participants decreased, and the scheme collapsed. Around 2020, it became known that fraudsters stole more than $5 billion in cryptocurrencies.
What happened to the organizers:
After the scheme was revealed, Chinese authorities launched large-scale investigations and several key organizers were arrested. However, many of the money was lost and many investors were never able to recover their funds. PlusToken has become a symbol of how high returns and aggressive marketing can lead to huge losses.
2. WoToken scam: Another major cryptocurrency pyramid
WoToken is another prime example of the cryptocurrency pyramid that has been revealed in China. Around 2018, the scheme attracted investors with promises of high revenues from cryptocurrency assets. The project used a model similar to PlusToken, where users received interest on their investments and could receive bonuses for attracting new participants.
How the scheme worked:
- WoToken promised its users profits that were generated not through real investments or cryptocurrency assets, but by redistributing funds between participants.
- In fact, the project used the funds of new users to pay income to old investors, creating the illusion of profit.
- As with PlusToken, WoToken went bankrupt when the pyramid stopped generating revenue and the project was closed. More than $1.1 billion was stolen before authorities could intervene.
Implications for investors:
As with PlusToken, many investors trapped in WoToken have lost significant sums. The Chinese authorities made several arrests, and also initiated investigations into the organizers of the scheme. Despite this, many of those who invested in the project were never able to get their funds back.
3. BitPetite scam: False promises from mining projects
BitPetite is another controversial cryptocurrency project in China related to cryptocurrency mining. The project promised investors revenue from mining bitcoin and other cryptocurrencies, claiming to use innovative solutions to create and manage mining farms.
How the scheme worked:
- BitPetite has attracted investors by offering strong revenues from cryptocurrency mining. However, in fact, no mining operations were carried out.
- Investor funds were used to pay other participants in the scheme, creating the appearance of profitability. The project was heavily advertised through social media and other channels, which helped raise large sums.
- The project eventually went bankrupt and all funds were lost. Scammers disappeared with cryptocurrencies and user money.
Consequences:
As with other major benches, BitPetite defrauded thousands of investors, leaving them out of pocket. After the disclosure of the scheme, Chinese law enforcement agencies began an investigation, but many users who lost money were unable to return their funds.
4. How to avoid cryptocurrency benches in China?
4.1. Study the project and its team
Before investing in a cryptocurrency project, it is important to carefully study it. Note the team information, user feedback, and the existence of independent audits. Scammers often hide their identities or provide false information about themselves.
4.2. Caution with promises of high returns
If a project promises incredibly high returns with minimal risks, it should always be alarming. Promises of 100% profit or more are a clear sign that the project could be a pyramid scheme.
4.3. Using Proven Platforms
You should invest only in well-known and proven cryptocurrency exchanges with a good reputation. Using platforms that are not audited or licensed may result in losses.
4.4. Avoid aggressive referral programs
Fraudsters often use referral links and bonuses to attract new members to expand their scheme. Be careful with projects that actively encourage referrals and attracting new users.
5. Conclusion
Cryptocurrency scam schemes in China continue to be a major threat to investors. Projects like PlusToken, WoToken and BitPetite are prime examples of how fraudsters can use the popularity of cryptocurrencies to create financial pyramids and deceive thousands of people. It is important to be risk aware and always scrutinise projects before investing.