Authorities in New Taipei, a special municipality and Taiwan’s most populous city, have arrested fifteen local residents for their alleged  involveme nt in orchestrating a digital currency scam through which they stole millions of dollars.

Promoting Fraudulent Crypto For Adult Entertainment

According to local news outlet Focus Taiwan, Li Chi-hsun, the chief of the Criminal Investigation Bureau (CIB), revealed during a meeting with reporters that fifteen suspects and their alleged leader (surnamed Lin) were taken into police custody. The suspects have been accused of defrauding more than 30 Taiwanese investors of almost NT $250 million (c. $8.16 million).

The Taipei District Prosecutors Office will reportedly be addressing the case, which involves the accused promoting a questionable cryptocurrency project called IBCoin. As noted by local news sources, IBCoin is an ERC-20 compliant token that may be accepted as payment for adult industry related products and services.

The suspects had been promoting the fraudulent scheme on social media by posting pictures of themselves driving expensive cars, while claiming they made large sums of money by investing in IBCoin. Police officials investigating the matter seized NT $2.02 million (appr. $65,000) in cash, “written guidelines on fraud procedures”, and three cars, local news sources reported.

Selling IBCoins At Exorbitant Rates

Authorities first learned about the operation in September 2018 when an unsuspecting local investor was lured into purchasing NT $600,000 (appr. $19,480) worth of IBCoins. According to the CIB, Lin had purchased IBCoins from traders in China (in 2017) at a low rate of NT $1.5 per coin. After acquiring IBCoins at very cheap prices, Lin had reportedly asked people working for him to sell the coins at a much higher rate of around NT $50-$100.

Those who invested in IBCoins claim that they never received any returns, the CIB revealed. The bureau also said they had performed an investigation through which they learned that IBCoins have no real value. Moreover, the CIB noted that there are no known exchanges or firms that deal in IBCoins.

Seven Other Taiwanese Residents Charged With Crypto-Related Fraud

On January 18th, seven other Taiwanese residents were charged for their alleged involvement in a digital currency investment scheme. Local news sources said the accused had lured many people into investing a total of about $51 million (since 2016). The seven Taiwanese men were arrested on June 13th, 2018, but had only recently been officially charged with violating Taiwan’s business and banking laws.

Case prosecutors explained that under Taiwan’s current legal framework, the accused would have been charged with violating local laws even if they were offering a bitcoin (BTC) investment scheme. After receiving complaints from local investors who claimed they never received any returns on their investments, police officials investigated the matter and have now indicted the seven suspects for running a fraudulent crypto investment scheme.