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Another crypto fraud took place in China. Six people are suspected of stealing $ 47 million from local investors.

According to Guangdong Daily, six suspects based in Shenzhen managed to entanglement 3000 investors and leave them without financial funds by selling a crypto asset that is worthless. To appear more credible, the six culprits have set up a company in Shenzhen and have called it PEB. In January 2017, PEB has launched its own cryptocurrency named Pu’er Coin, according to the news.

At present, six criminal suspects have been arrested, involving a total amount of 307 million yuan. At a time when the “5·15” Combating and Preventing Economic Crime Publicity Day was held, the police reminded investors to increase their awareness of risk and not to be blindfolded by such gorgeous cloaks as the blockchain. The high profits publicized by the investigators are often huge risks behind,” reported Guangdong Daily.

The scam scheme worked on a buy-gain concept. Buyers of platform’s tokens were required to first acquire a minimum amount of Pu’er Tibetan tea that PEB owned and a property document of it. The crypto team was promising investors that tea is very valuable.

Investors were cheated by the six suspects, receiving a 12% investment guarantee in just one year. According to police reports, PEB held a “very limited amount of the tea in stock“, promising high returns in a short time.

The fraudulent scheme

The first step is to package fresh elements in the virtual currency and put on the coat of “blockchain”. The company’s announcement of “Pu’er coin” (later renamed as “Puyin coin”) is a kind of self-proclaimed use of billions of Tibetan tea …  The second step is to conduct crazy propaganda in the early stage to attract a lot of hot money into the market In the third step, the suspects pulled up the currency price in the early period, allowing the “investors” to enjoy some sweetness … The last is to “cut the leeks.” When a large number of investors entered the market, the company maliciously manipulated the price movements of ordinary silver coins and continued to cash out,” wrote the Guangzhou Daily.

According to the police, the scam platform has managed to attracy an impressive number of investors by manipulating them. A month ago, the company received a notification from China’s State Administration for Market Regulation. They issued a $ 20 million fine for distributing false information online.

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