Taiwan prosecutors have indicted seven Bitcoin traders for allegedly duping thousands of investors of their investment worth $51 Million, according to a report published in Focus Taiwan.
The group of seven Bitcoin traders lead by a 47-year old man, who goes by his surname Lin, were arrested back in June 2018, and have been formally indicted this week. The fraudulent group is charged with multiple violations of Taiwanese banking and business laws.
Thousands of Investors Duped on Promise of 355% returns
The Taiwanese prosecutors claimed that the Bitcoin Scammers lured 1000 investors from Taiwan and China, by promising them hefty returns a year after the investment. The scam which was carried out since 2016 has promised its investors of 355% returns.
The prosecutors said that most of the investors never received any returns until February 2018, and by April 2018 the returns stopped altogether.
Scams and Money Laundering Threats Hampering Bitcoin Mass Adoption
The Taiwanese government has made amendments to its money laundering prevention act as well as various steps to regulate the cryptocurrencies. The steps have been taken to prevent the use of crypto and Bitcoin in money-laundering activities and terrorism funding.
Many believe that these illegal activities related to crypto laundering and use in terrorism funding are making the government’s to maintain their hard-strand against crypto adoption.
However, Taiwan has announced that it is working on different factors to regulate the crypto market rather than an outright ban on the crypto activities.
The raging debate about, whether Bitcoin has the potential to become a form of financial exchange or currency. Many against the idea argue that the basic principle of a currency is to have a store value, which Bitcoin does not and thus, it would be very hard to push Bitcoin as a form of currency.
The recent Bitcoin scam which saw a group of seven being charged and indicted on various counts is the exact example on why most of the governments around the globe are reluctant to pave the path for Bitcoin or Altcoin adoption.
Since cryptocurrency is just a bunch of codes, with no real-world entity backing it store value, it’s very hard to predict the prices and nature of the crypto market. The volatility factors are governed by PR buzz and media reports, and reports of these scams will only lower the trust and give the government another reason to discard the potential of Bitcoin and its mass adoption.
Being a fairly new tech, Blockchain Technology and Cryptocurrency is already struggling to gain momentum, and news like these will only prolong its boom as the mainstream form of financial exchange.