Shaoxing's first virtual currency fundraising fraud case was cracked: more than 1 million yuan was defrauded and more than 70 people were harmed

At present, the fever of "virtual currency" is still high, and many criminals are "riding on the heat" to commit crimes under the banner of "virtual currency". Recently, the Economic Investigation Brigade of the Keqiao District Public Security Bureau cracked a fraud case that used virtual currency to raise funds. The team used the platform to produce a total of 700 million electronic virtual currencies EATK, set up an electronic online mall, adopted a model that combined point rebates with virtual currency , and used online communities and social software to carry out extensive publicity, deceiving a large number of victims. The victims were spread across Zhejiang, Liaoning, Shandong, Hubei, Hunan and other provinces and cities.

At present, the Keqiao police have taken criminal coercive measures against the four suspects and recovered more than 300,000 yuan in stolen money.

Photo by Zhu Minrui

Criminals use their mouth to suck 170,000 yuan

In early September, the Economic Investigation Brigade of the District Public Security Bureau received a report from the victim, Du. Du said that he was from Yunnan and purchased virtual currency worth more than RMB 170,000 issued by Hangzhou Yite E-Commerce Co., Ltd. However, a month later, the company did not fulfill its earlier promise to Du. When Du decided to withdraw, it was too late.

Seeing that his investment of more than 100,000 yuan had become a pile of numbers that he could only look at but not use, let alone appreciate in value, Du realized that he had been cheated and reported the case immediately.

According to Du's recollection, when the company was selling virtual currency to Du, it also promised that the purchased virtual currency would be repurchased with principal guaranteed, and also promised him an investment prospect that the virtual currency would appreciate in value. Du could also use the purchased virtual currency to make purchases in the shopping mall set up by the company, and could even buy mobile phones, cars and other products in the mall.

In this way, Du was deceived by the criminals who painted a big pie for him.

Keqiao police promptly launched an investigation

Since this was the first time to report a case involving electronic virtual currency, the police officers of the Economic Investigation Brigade of the District Public Security Bureau attached great importance to it and accepted it immediately. After preliminary investigation, it was found that although the registered place of Hangzhou Yite E-Commerce Co., Ltd. was in Hangzhou, its office address was actually in Qianqing.

Through investigations into the company's operating and financial conditions, as well as background checks on the company's principal persons in charge, operating personnel and other management personnel, it was discovered that the company's operating conditions were poor, there was little liquid capital in its accounts, and the personnel involved had no legitimate business background, raising the suspicion of the case.

To this end, the police searched for related cases in detail on the Internet and consulted with brother units in other places. Taking into account that there have been frequent cases of electronic virtual currency fraud across the country since September last year, combined with the local case handling situation, the police conducted a detailed analysis and believed that the case was indeed suspicious, so they decided to file a case for investigation.

After investigation, the Keqiao police found that Hangzhou Yite E-Commerce Co., Ltd. did not have its own technical capabilities. This electronic virtual currency named EATK was also produced by other companies in Shenzhen. The company also did not have any real economic support. From this point of view, the case was more likely to involve fraud.

Subsequently, the Keqiao police summoned the actual controlling shareholder and management personnel of the company to the brigade for investigation. According to the confessions of several suspects, they had invested in electronic virtual currencies since 2017, but suffered heavy losses, so they decided to gather together to set up and operate a platform for financing and making money.

The victim described the details of the deception process

During the police investigation, many victims came to Keqiao to report the incident. Mr. Li from Hebei was one of them. Mr. Li described his experience of being victimized in detail to the reporter.

According to Mr. Li's recollection, he bought virtual currency EATK from the suspect Lao You, a virtual currency worth 30 cents per coin, and he ordered 100,000 coins. Lao You said in his promotion that they were operating an online mall, which had a wide variety of goods and cheap prices. EATK would gradually appreciate as the circulation of online shopping transactions increased, and once it appreciated, the things you bought would become cheaper.

"I usually shop online quite a lot, so this kind of promotion makes me very interested." Not only can one invest in financial management, but also consume, this deal is quite cost-effective, so Mr. Li was tempted. What impressed Mr. Li the most was that during the promotion, the company claimed that its mall was invested by a well-known Keqiao enterprise. However, Mr. Li never expected that not only did the purchased virtual currency not appreciate in value, but he could not even shop in the mall. The so-called investment from a well-known enterprise was also a false promotion, the purpose of which was just to attract investors.

Establishing a platform for mall rebates and virtual currency to commit fraud

Earlier, the reporter met the criminal suspect You in the Keqiao District Detention Center. According to You, he started out as a mall rebate platform and made a small profit at first, but many rebate platforms ran into problems last year due to the country's policy trends. You withdrew early and did not suffer much loss. At this time, virtual digital currencies such as Bitcoin appeared on the market. You took a fancy to this emerging method and turned to investing in virtual currencies, but he never thought that virtual currencies themselves were not allowed by the country, so his investment was cut in half and all of it was locked up.

At this time, friends found You. According to them, there was also a company in Shaoxing that operated a rebate platform, and they valued You's connections. After several people discussed, they decided to cooperate to establish a mall rebate plus virtual currency platform to carry out fraud.

According to Xu Han, the police officer in charge of investigating the case, the rebate model of the mall is just a way to pretend to create a cash back channel for investors, making them think that their investment can be profitable. Investors often only focus on the returns brought by the investment, but never consider the risks. Xu Han said that when the police arrested several suspects, this electronic virtual currency had already been introduced to the pyramid scheme team and promoted in various provinces and cities across the country. Roughly speaking, there were more than 70 victims and the amount involved was over one million yuan.

Be cautious with any form of investment

Coincidentally, just last month, the Keqiao police discovered while handling a fraud case that the suspect Lin was also suspected of virtual currency fraud. Not only did he not make any profit, he also took away the Bitcoins of 12 victims.

Indeed, in recent years, as the wealth effect of cryptocurrencies such as blockchain and Bitcoin has continued to be hyped up by the media, many lawless elements have arbitrarily issued virtual and digital currencies under the banner of blockchain and financial innovation, and used these methods to absorb the property of the vast number of investors who dream of financial freedom and infringe on the interests of investors.

Human greed is exploited by people with ulterior motives, and fraud occurs. For this reason, the Keqiao police specifically reminded that the police will continue to increase the intensity of combating electronic virtual currency fraud, but more importantly, investors should enhance their self-protection awareness. Before starting any investment, you should spend more time to do research, understand the team, familiarize yourself with the product, and learn more about relevant national laws and policies before considering whether to invest.