Anika Begay
Singapore investors recently fell victim to a major cryptocurrency scheme that resulted in the theft of approximately $1.1 million in their assets.
This scheme, which was a fraud from the start, highlights the risks associated with investing in seemingly profitable cryptocurrency ventures.
Technology Abuse and Cryptocurrency Investors Lose
According to the latest report by Channel News Asia (CNA), the CTO of a “notorious” cryptocurrency investment firm has been sentenced to five years in prison for his role in orchestrating a fraudulent scheme that defrauded investors of $1.1 million.
The company, founded by the “once famous” Chinese entrepreneur Yang Bin, has attracted significant investment, amounting to $6.7 million, by falsely promising substantial returns through its “tailor-made” cryptocurrency mining business.
The company, A&A Blockchain Innovation, was founded in April 2021 and it didn’t take long for it to unveil its Chain Mining Scheme. CNA reported that this scheme was aggressively marketed to local investors, promising a fixed 0.5% daily return from cryptocurrency mining.
The deal claimed to have struck a deal to acquire a majority stake in a fleet of 300,000 mining rigs in Yunnan, China, “supposedly” capable of mining high-value cryptocurrencies like Bitcoin and Ethereum.
However, the reality was different. A&A Blockchain Innovation had no such agreement, nor did it own any mining equipment. Instead, the company was running a “classic Ponzi scheme,” relying on funds from new investors to pay returns to previous ones.
This deceptive practice was further facilitated by a custom-built app developed under the supervision of Wang Xinghong, designed to manipulate data and deceive investors about their investment returns.
Legal Repercussions and Ongoing Investigations
Wang Xinghong, who played a key role in developing the fraudulent app, has faced multiple charges of conspiracy to cheat, according to CNA. The report reads:
Wang was hired by Yang to develop the mining app. He knew there was no real mining, no real returns to be paid. He developed the app as a centralized software where China-based system operators could input random numbers to falsely reflect investor returns. Wang was responsible for maintaining the app and managed a team of system operators in China. He admitted to receiving about US$100,000 from his involvement.
Although he was not the mastermind behind the scheme, the report revealed that his technical expertise was instrumental in perpetuating the fraud.
So far, Wang is set to spend “four to five years” in prison, as suggested by the prosecution. However, his “defense lawyers Adrian Wee and Lynette Chang of Lighthouse Law have requested a prison sentence of three and a half years and three years and 10 months,” CNA noted.
Meanwhile, the fallout from this scandal continues, with police actively investigating the business activities of A&A and its affiliates.
Featured image created with DALL-E, chart from TradingView
