Mastermind Behind $14 Billion Crypto Pyramid Scheme Extradited to China from Thailand

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Insidebitcoin2024/08/28 02:37

By:Insidebitcoin

China has successfully extradited a suspect, known only by the surname Zhang, from Thailand. Zhang is accused of orchestrating a large-scale pyramid scheme that involved cryptocurrency, drawing in billions of dollars. This case marks the first financial criminal extradition between China and Thailand under an agreement that has been in place since 1999.

Extradition of Zhang: A Landmark Financial Crime Case

Zhang is alleged to have been the leader of the pyramid scheme under the name “MBI Group,” which started operations in 2012. Through this scheme, Zhang reportedly attracted over 10 million members by offering memberships that promised high returns. These memberships were sold at fees ranging from 700 yuan ($98) to 245,000 yuan ($34,300), and were tied to cryptocurrency issuance. The total funds involved in this fraudulent activity are said to have exceeded 100 billion yuan, equivalent to approximately $14 billion.

China’s Ministry of Public Security revealed that the arrest of Zhang came as a result of a collaboration between Chinese and Thai authorities, known as the “Hunting Fox” task force. On Wednesday, Zhang was handed over to Chinese authorities following his extradition from Thailand. Zhang’s case has drawn significant attention because it is the first financial crime that has led to an extradition through the China-Thailand treaty since its implementation.

An investigation into Zhang’s activities first began in Chongqing, a major city in southwestern China, in November 2020. In March 2021, the Chinese branch of Interpol issued a red notice for Zhang, making him a wanted man across international borders. Following this, Zhang was arrested in Thailand in July 2022. A Thai court eventually ruled in May of this year that Zhang should be extradited back to China.

Despite China imposing a ban on cryptocurrency trading on the mainland in 2021, many investors have continued to seek ways around the restrictions. In one related case, Chinese authorities uncovered an underground banking operation in May that involved at least 13.8 billion yuan ($1.9 billion) in transactions. This illegal network used the USDT stablecoin for foreign currency exchanges.

In an effort to combat the increasing use of cryptocurrency in illicit activities , Chinese legal authorities have recently broadened their definition of money laundering. Earlier this week, China’s top judicial institutions included the use of cryptocurrencies for moving illegal funds in their legal interpretation. This shift will make it easier for law enforcement to investigate and prosecute cases of money laundering linked to cryptocurrencies.

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