Eight Arrests in China After Rug Pull Steals Millions
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Eight Arrests in China After Rug Pull Steals Millions

5 months ago

Pictures provided by the police showed bundles of banknotes, along with a high-end Audi that was decorated with a bow.

Eight Arrests in China After Rug Pull Steals Millions

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Eight people have been arrested in China in connection with a "rug pull" scam involving cryptocurrencies.

They are accused of obtaining 50 million yuan (about $7.8m at the time of writing) through illegal means.

Hundreds of people are believed to have placed money into what appeared to be a legitimate investment opportunity, but they later lost contact with the project's founders after the website was closed. The police explained:

"The case involved a huge amount of money, a large number of people involved, and the masses suffered heavy losses."

It appears that the smart contract code used for the project had a "backdoor" that meant cryptocurrencies could be withdrawn without the consent of investors — and then transferred to an anonymous pool for money laundering.

Pictures provided by the police showed bundles of banknotes, along with a high-end Audi that was decorated with a bow. A statement added:

"The suspects' property, such as villas and luxury cars worth tens of millions, purchased with all the stolen funds, was seized and seized in accordance with the law."

Work is continuing to reunite the victims with their lost funds.

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China Clampdown Continues

The police action comes as Beijing continues its clampdown against cryptocurrencies — measures that have predominantly targeted Bitcoin miners.

Instead, the country has been focused on developing its own central bank digital currency, the digital yuan, which is set to play a starring role at next month's Winter Olympics.

State media has issued regular warnings to consumers about the dangers of investing in cryptocurrencies — expressing fears that many of the digital assets on offer turn out to be fake.

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