Cryptocurrency Scammers Arrested In Taiwan

Crime, News | January 28, 2019 By:

Fifteen alleged crypto scammers have been arrested in Taipei, Taiwan for defrauding over 30 unsuspecting investors of nearly NT$250 million ($8M USD).

At a press conference, Li Chi-hsun, chief of the Criminal Investigation Bureau (CIB), said that the suspects, including the alleged leader surnamed Lin, were nabbed in two separate raids carried out on January 9 and January 17. During the raids, CIB officers also seized NT$2.02 million ($70,000 USD) in cash, three automobiles, and written guidelines on fraud procedures.

The CIB chief said the suspects allegedly defrauded the victims by promoting IBCoin, an ERC20 token aiming to be a means of payment for the adult entertainment industry. Lin reportedly purchased IBCoins through his connections in China at a rate of NT$1.5 ($0.05 USD) per unit in 2017. He then asked the people working for him to sell them at NT$50-NT$100 ($1.63-$3.27 USD) per unit to victims and promise big returns.

“The group of fraudsters would often pretend to show off their earnings through Facebook, posting pictures of lavish lifestyles and expensive cars to lure them into buying more IBCoins,” Chi-hsun said. “But none of the victims have reported ever seeing any returns. The virtual currency is a dud and has no real value, and that there are currently no known companies that trade or deal in IBCoins.”

According to the CIB, the 15 suspects have been charged with fraud, and the case has been handed over to the Taipei District Prosecutors Office.

In November 2018, the Legislative Yuan, Taiwan’s highest legislative body, passed amendments to the Money Laundering Control Act and the Terrorism Financing Prevention Act, which give Taiwan’s Financial Supervisory Commission (FSC) the authority to bar anonymous crypto transactions. Under the new provisions, crypto companies will be required to implement a system that requires users to register their real names.

“If they don’t, banks can reject anonymous virtual currency transactions and report them to the FSC if they deem them suspicious,” the government said at the time.