Chinese authorities have reportedly seized more than $15 million in crypto-assets and $2 million in supercars after busting up an arbitrage scam selling counterfeit tokens.
According to a report by China’s Ministry of Public Security, police in the city of Wenzhou arrested 10 individuals connected to operating a fraudulent cryptocurrency scheme. The report claims the arbitrage group was scamming victims using blockchain smart contracts to generate fake cryptocurrencies.
Following the bust, authorities seized bitcoin, ether, and tether worth over 100 million yuan ($15 million). The report also claims police seized several supercars, including a Ferrari and a McLaren valued at more than $2 million, in addition to the luxury villa in which the scammers were staying.
The arrested individuals had reportedly operated a smart contract scheme since 2019, which advertised a blockchain product that claimed to generate Huobi’s native token HT. Unsuspecting consumers were promised the tokens would generate arbitrage opportunities worth a return of up to 8%.
One victim, identified as Li in the report, first notified police after joining a Telegram group belonging to the scam artists.
Li told authorities,
Simply put, you send one unit of ETH to a designated address, you will receive 60 HT. And then you can sell it to gain the difference.
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