Prosecutors in Taiwan have accused seven bitcoin traders of running a fraud crypto investment plan that swindled $51 million USD from over more than 1,000 of its investors. According to Focus Taiwan, the leader of this scam is a 47-year-old man named Lin. The scammers have been charged with multiple violations of the banking and business laws of Taiwan.
The criminals were arrested in June last year but they have been formally indicted this week. According to the research of officials, the group looted around $51 million USD from 1,000 of its investors across China and Taiwan since the year, 2016. The criminals wooed the investors by making false promises of extraordinary returns. According to the Taiwanese Investigation Bureau, the fraudulent bitcoin scheme made a false promise that the investors could enjoy returns of up to nearly 355% after a year of their investment. Prosecutors have confirmed that most of the investors never received returns on their investments until February last year. Around April last year, the investors stopped receiving any returns altogether.
The government of Taiwan has taken serious steps to regulate the crypto assets to stem the use of bitcoin for terror funding and money laundering. In September last year, the Cabinet of Taiwan approved changes to the Terrorism Financing Prevention Act and the Money Laundering Control Act. The goal of the amendment was to tighten the supervision of the banking and the crypto sector. In October last year, an official underscored that Taiwan would not be following the examples set by China and South Korea through the inclusion of an outright ban on crypto activities.
In the United States, there has been a similar doubt about the mass bitcoin adoption due to the nagging concerns among the regulators. According to CCN, John Williams, the president of the Federal Reserve Bank of New York has insisted that crypto will never be able to replace the US dollar because it fails the basic test of what exactly a currency should be.
“Cryptocurrency doesn’t pass the basic test of what a currency should be. The setup around bitcoin and other cryptocurrencies. First of all, they have problems with fraud, problems with money-laundering and terror financing. There’s a lot of problems.”
According to a study, sex-advertising website, Backpage has been used for cryptocurrency exchanges to fraud millions of dollars in bitcoin. The Department of Justice of the United States has accused the online sex marketplace of prostitution and money laundering. The Department of Justice had shut down Backpage in April last year.
The Justice Department alleged,
“Backpage furthered its money laundering through the use of bitcoin processing companies.”