Bitcoin Asia Flash Center absconded with 100 million yuan in funds and was suspected of fundraising fraud

Original title: Bitcoin Asia Flash Center runs away with 100 million yuan

As a "star investment product", Bitcoin has also become a major target for scammers to deceive investors, and similar Bitcoin investment scams are emerging one after another. Beijing Business Daily reporters learned that recently, a Bitcoin Asia Lightning Trading Center (hereinafter referred to as "Asia Lightning") has encountered a repayment crisis and is suspected of running away. The platform once managed Bitcoin investment on behalf of customers and promised investors fixed dividends and withdrawals at any time. However, on January 5, "Asia Lightning" not only stopped dividends, but also closed its website, and is suspected of running away with investors' funds of more than 100 million yuan. In the eyes of lawyers, the Asia Lightning platform's fundraising fraud is very obvious, and investors should unite and report the case as soon as possible.

It has been running for 9 months and is suspected to be shut down

"I have been engaged in financial investment for many years, and this is the first time I have fallen victim to a fraudulent institution." An rights protection investor named Li Ming (pseudonym) lamented to the Beijing Business Daily reporter.

In December 2016, Li Ming and several friends invested in the "Yashan" platform through a friend's introduction. At first, they did not trust the platform and thought it was an obvious scam. However, after joining a Yashan investment group and observing for a week, they found that many investors had received dividends. Unable to resist the temptation, Li Ming also invested one or two bitcoins tentatively. "In the first few weeks, we received 1.3%-1.4% dividends every day, and then we increased our investment." According to Li Ming, he and his friends invested a total of 200 bitcoins. According to the lowest price of 5,227 yuan per bitcoin in December last year, the investment amount was at least one million yuan, but now they can't even get back the principal.

Li Ming said that "Yashan" mainly attracts social investors by establishing several WeChat groups. Investors buy Bitcoin on well-known domestic Bitcoin trading platforms such as Huobi.com and Bihang, and then entrust the purchased Bitcoin to "Yashan" for trading. At the same time, "Yashan" promises to pay investors a dividend of 1.3% in the form of Bitcoin every day regardless of whether the price of the currency rises or falls, and the principal can be withdrawn at any time.

"In the first few months, the dividends paid by 'Asian Flash' to members were transferred to the Bitcoin trading platform on time at around 0:30 in the morning, and investors could sell them and cash them in RMB and withdraw them to their bank accounts. But after running for 9 months, on January 3-4, 2017, the dividends of 'Asian Flash' began to be delayed, and the website was suddenly closed at noon on January 5. Currently, the member website is still unable to log in." Li Ming said.

It is worth mentioning that since 2016, the Bitcoin market has been very hot. In the past year, Bitcoin has risen from 2,400 points to nearly 9,000 points, with a cumulative increase of more than 270%, which is much higher than many domestic investment products. However, on January 6, three Bitcoin trading platforms were interviewed by the central bank and local regulatory authorities, and the price of Bitcoin plummeted. "Asian Flash" also began to flee during this sharp drop.

Beijing Business Daily reporter learned that there are many rights protection investors like Li Ming. Investors have been joining the rights protection group where the reporter is in recent days, and the number of people is close to 440. According to the "Asian Flash" investors, there are many similar rights protection groups, and the amount involved in this case is at least hundreds of millions of yuan.

Unlike many fraud companies that use offline promotion, "Yashan" mainly conducts marketing through WeChat groups, which means that investors don't even know who the person in charge of "Yashan" is. "We can't find the person in charge of "Yashan" at all. We all invested in it through referrals." Li Ming said.

Beijing Business Daily reporters also saw from the marketing information of "Yashan" that the sales method is very similar to pyramid schemes. "You can choose to withdraw dividends and market bonuses every day. The market bonus is divided into five generations: the first-generation leader can get a 6% bonus; the second-generation leader can get a 4% bonus; the third generation 3%; the fourth generation 2%; the fifth generation 1%. In addition, the platform sets up promotion dividends. As long as you promote Bitcoin Lightning transactions on social networking sites every day, you can get a 0.1% promotion reward by taking a screenshot and uploading it after completion." The marketing information reads.

Currently, the "Asian Flash" websites provided by investors cannot be opened. The reporter searched and found that there is still a website called "Bitcoin Asian Lightning Trading" on the Internet. However, when contacting the website operator Wang, Wang said that the website is his personal website and has nothing to do with "Asian Flash". His website has never received a penny from investors.

Suspected of fund-raising fraud

In the opinion of experts, "Yashan" is an obvious fraud. Xiao Lei, chief researcher of Golden Wallet, said that "Yashan" is an obvious fraud. They first give you dividends to attract you to continue investing, and then when the amount of funds reaches a certain level, such platforms will abscond with the money. This kind of fraud not only occurs in the Bitcoin industry, but also in many industries in China.

Xue Hongyan, a senior researcher at Suning Financial Research Institute, also said that from the perspective of its operating model, this platform has the typical characteristics of a scam platform, namely, it lures investors with absolutely high interest rates (1.3% daily interest, equivalent to 474.5% annual interest), continues to operate for a period of time and pays interest normally, on the one hand attracting more investors, and on the other hand inducing existing investors to invest more funds. Finally, some unexpected factors make the scam model unsustainable, and the platform runs away.

In fact, the profit source of "Yashan" is also untenable. "Yashan" marketing information mentioned that with the recent sharp fluctuations in the price of Bitcoin market, a new profession has gradually emerged in the circle, commonly known as "moving bricks". These "moving bricks" movers pay attention to major Bitcoin trading platforms every day. Once they find a price difference, they buy Bitcoin from the low-priced platform and sell it on the high-priced platform to make a profit from the price difference. This is the profit source of "Yashan".

Xiao Lei said that the cost of arbitrage through Bitcoin trading platforms is very high, and it requires the support of hardware and software, which belongs to programmatic trading. If the level of arbitrage can be achieved, there will be no need to raise funds from the market. This behavior of earning price differences exists in any market, but it mainly depends on the cost and space. The Bitcoin market space was once relatively large, and the quotations of various platforms were quite different, but now they are gradually converging, and the arbitrage space is getting smaller and smaller. Many arbitrages actually use the derivatives market. For example, some platforms have leveraged short selling in the form of futures, which reduces the cost of arbitrage, but this is very professional and requires hardware, software and personnel. Once it is established, its cost is very high, even millions of yuan. Once the arbitrage space disappears, the platform begins to limit the frequency of buying and selling, or increase transaction fees, etc., which will cause this arbitrage to directly lose money. Therefore, the so-called Bitcoin cross-platform arbitrage is overestimated. Many people actually just use this rhetoric to fool investors.

Xue Hongyan said that the profit model explained to investors by "Yashan" is not sustainable. Although there are price differences between various Bitcoin trading platforms, no one can guarantee the size of the price difference and how long it will last. In this case, the promise of a 1.3% daily dividend to investors exposes the lack of basic proof in the platform's operating model, and the intention of fraud is very obvious.

Lawyer says the case should be reported as soon as possible

For investors, lawyers suggest that they should report the case to the public security organs as soon as possible. Wang Deyi, a lawyer at Beijing Xunzhen Law Firm, said that according to the provisions of Chinese law, any investment cannot guarantee returns, and the promise of a daily rebate of 1.3% is definitely not in line with normal business logic. Investors should check whether the "Yashan" website has been legally registered, through what channels the transaction funds are remitted, and who is the recipient. From the current situation, the organizers of these WeChat groups use high returns to lure investors to participate in transactions, and quickly disappear after investors discover the problem, and the channels and destinations of the transaction funds are unknown. The above characteristics indicate that their behavior is suspected of fraud, and it is recommended that investors jointly report the case to the public security organs.

Xiao Sa, deputy director of the Internet Finance Committee of Beijing Dacheng Law Firm, said that the public security, procuratorial and judicial organs will determine that the platform's behavior is suspected of fraud. Investors should find the contract between themselves and the platform, and then collect data and materials related to the platform's illegal behavior, and promptly report to the public security organ where the platform is registered. In addition, if the suspect or suspected unit has fled, you can apply to the procuratorate to intervene in the investigation and seal up the property involved. "On January 5, the "Regulations on Several Issues Concerning the Application of the Procedure for Confiscation of Illegal Gains in Cases Where the Suspect or Defendant Flees or Dies" was issued, which can be applied to the situation where the suspect of a major financial fraud case flees, and the funds are returned to the victims in a timely manner and the suspect's other assets are confiscated." Xiao Sa said.

Two formal channels for investing in Bitcoin

It is worth mentioning that the current domestic regulatory authorities have not explicitly banned the existence of Bitcoin transactions, but investors should still choose formal investment channels. The announcement issued by the central bank on January 6 also reiterated that according to the "Notice on Preventing Bitcoin Risks", Bitcoin is a specific virtual commodity, does not have monetary attributes such as legal compensation and compulsion, does not have the same legal status as currency, and cannot and should not be circulated and used as currency in the market. Institutional and individual investors should have a correct view of virtual commodities and virtual currencies, invest rationally, bear their own risks, maintain their own property security, and establish correct monetary concepts and investment concepts.

Wang Deyi said that currently in my country, the law does not completely prohibit the trading of virtual currencies such as Bitcoin, and investors can buy and sell them as commodities on the Internet, and should bear their own risks. However, when investors participate in any transaction, they should first ensure that the transaction is legal and valid, and they must review the other party's qualifications, funding channels, transaction models, etc., and sign a written transaction agreement.

Beijing Business Daily Financial Investigation Team Zhang Bin/Table

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