The case involved 7.7 billion! The second trial verdict of "Wotoken Wallet" was announced!!!

Source: Capital Ranking

On May 14, the "wotoken" network pyramid scheme case was heard in public at the Binhai County People's Court in Yancheng City, Jiangsu Province. On August 27, the Binhai County People's Court disclosed the criminal verdict of the network pyramid scheme case. After the first-instance verdict was announced, Gao Yudong, Li Qibing, Wang Xiaoying, and Tian Moubo were dissatisfied and filed an appeal.

On October 27, the Intermediate People's Court of Yancheng City, Jiangsu Province, published the second-instance criminal ruling on the "WoToken" large-scale virtual currency pyramid scheme case through the China Judgment Documents Network. The Wotoken large-scale wallet virtual currency fraud case was finally settled.

Judgment Documents Network

Development

In 2016, Gao Yudong invested in the establishment of Shenzhen Qianhai Bobao Technology Co., Ltd. (hereinafter referred to as Bobao Company) in Shenzhen City, Guangdong Province. The company's main business is to engage in the maintenance and issuance of virtual digital currency exchanges such as WOEX.

In 2018, Wang Xiaoying came into contact with the Plustoken MLM platform under the guise of blockchain digital currency through her friend Chen Bo. Later, Chen Bo asked Wang Xiaoying, Li Qibing and Liu Liangting to be responsible for market promotion.

A month later, Wang Xiaoying, Li Qibing and Liu Liangting discovered that the technology of the plustoken pyramid scheme platform was immature, and members often left the platform after losing their coins. However, they had mastered the criminal methods of online pyramid schemes. In order to obtain illegal profits, they planned to cooperate with APP platforms with similar functions and engage in online pyramid scheme criminal activities.

Around August 2018, Li Qibing found Gao Yudong and introduced Wang Xiaoying and Liu Liangting (who was detained and at large) to Gao Yudong. The four of them jointly agreed to build the WoToken platform, fabricate the "Apollo" robot, conduct arbitrage transactions on global digital currency exchanges, and promise to pay investors static and dynamic returns to defraud members of their money and property.

Gao Yudong then used the company's technology and hired technical personnel to develop a platform called WoToken. After the WoToken platform was put into operation, Gao Yudong was mainly responsible for the technical maintenance of the WoToken platform, digital currency management, employee salary distribution, and manipulation of the platform's WOR coin release; Gao Yudong's wife Tian Moumou assisted in the custody of the WoToken platform's digital currency, exchange of digital currency, and employee salary distribution; Li Qibing, Wang Xiaoying and others were mainly responsible for the promotion and training of the WoToken platform.

The income for members on the WoToken platform mainly consists of static income, dynamic income and community income models. The dynamic income model requires members to develop downlines, and use the funds invested by downlines to pay for the income of online members. Community income means that after members develop downlines to reach the number and amount specified by the system, they will obtain additional income in addition to static income and dynamic income.

The confessions of multiple defendants and witnesses confirmed that these static income, dynamic income and community income all come from the principal invested by offline members, with the purpose of defrauding members' funds. At the same time, the WoToken platform itself has no profit-making ability and no legal income, it is just a Ponzi scheme. The intelligent income of the "Apollo" robot is also fake. Normal high-frequency quantitative trading refers to buying low and selling high between different exchanges around the world, and the WoToken platform does not have this function at all.

As of October 8, 2019, the WoToken platform had a total of 715,249 registered members, and the USDT, BTC, ETH, LTC, BCH, and EOS digital currencies it absorbed were worth more than 7.7 billion yuan on the day of the incident.

During the period of managing the digital currency of the WoToken platform, Gao Yudong and Tian Moumou withdrew and cashed out approximately RMB 16.17 million and USD 1.58 million; Li Qibing withdrew and cashed out approximately RMB 23.389 million; Wang Xiaoying withdrew and cashed out RMB 2.36 million, and used the illegal profits from the withdrawal and cashing out to purchase two properties in Country Garden Lida Tianxi in Zaoyang and a Porsche sedan.

Concealing and hiding the proceeds of crime: On the afternoon of October 30, 2019, Li knew that there was ETH, a digital currency obtained through crime, in Li Qibing's two mobile phones, but still helped Li Qibing transfer and hide 49,752.3737 ETH.

Harboring: Since October 8, 2019, the defendant Tang knew that Wang Xiaoying used the WoToken platform to organize and lead pyramid schemes, and knew that the public security organs were arresting people related to the WoToken platform, but still provided a residence for Wang Xiaoying to hide until the defendant Wang Xiaoying was arrested.

Verdict

The Binhai County People's Court held that the actions of Gao Yudong, Li Qibing, Wang Xiaoying, and Tian Moumou constituted the crime of organizing and leading pyramid selling activities, and the circumstances were serious; Li Mou knew that the digital currency held by Li Qibing was the proceeds of crime, but still helped to transfer and hide it, and his actions constituted the crime of concealing and hiding the proceeds of crime, and the circumstances were serious; Tang Moumou knew that Wang Xiaoying was a criminal, but still provided him with a place to live, and his actions constituted the crime of harboring.

In order to strictly enforce the state law, crack down on crime, and protect the socialist market economic order from illegal infringement, in accordance with the relevant laws, Gao Yudong was sentenced to eight years and six months in prison and a fine of 2 million yuan for organizing and leading pyramid selling activities; Li Qibing and Wang Xiaoying were sentenced to seven years in prison and a fine of 1.5 million yuan; Tian was sentenced to two years and six months in prison and a fine of 1 million yuan.

At the same time, Li and Tang were sentenced to suspended sentences of five years and one year, respectively, for the crime of concealing and hiding the proceeds of crime and harboring, and fined 100,000 yuan. The seized stolen money of more than 425.69 million yuan and interest, as well as the illegal gains, were confiscated and turned over to the state treasury.

After the first instance verdict was announced, Gao Yudong, Li Qibing, Wang Xiaoying, and Tian Moubo were dissatisfied and filed an appeal. After the second instance court accepted the case, it formed a collegial panel in accordance with the law. After reading the case files, questioning the appellants, and listening to the opinions of the defense lawyers, it was found that the facts of the case were clear, the facts determined by the original judgment were clear, the evidence was reliable and sufficient, the conviction was accurate, the sentence was appropriate, and the trial procedure was legal, so it decided not to hold a trial. On October 19, the second instance court rejected the appeals of the appellants in accordance with the relevant laws and upheld the original judgment.

The "Wotoken" wallet case is expected to serve as a warning to investors. The so-called "arbitrage" model is actually not able to generate such high returns in the cryptocurrency world. It is just a scam by some people under the guise of "arbitrage". Also, if the market appears to be upgraded to 2.0 or has favorable policies, and you are not allowed to deposit money, you must be vigilant, because that may be the last round of the trader preparing to run away.