BTC Wires

Two Chinese Individuals Arrested For Illicit OTC Crypto Trading

With the rise in the popularity of cryptocurrencies, and their overall acceptance as a legitimate method of payment, the number of illicit activities, related to it, have also increased. This has become a significant controversy in the crypto world, regarding the safety and guarantee of these assets. As per recent reports, published by a Chinese newspaper, The Beijing News on May 22, two Chinese over-the-counter (OTC) traders have been accused of conducting an illegal bitcoin (BTC) loan scheme and collecting bitcoin by promising interest on deposits.

The article elaborated that the two individuals who go by the names, Yi Zhou and Xiang Li convinced traders to send them their bitcoin holdings by assuring them high interest on their deposits, successfully obtaining over 7,000 BTC (nearly $54.7 million at press time) from more than 100 investors. The allegedly defrauded investors first started harbouring suspicions when the interests that were paid in yen stopped arriving on time in April.

The two individuals reportedly gained investors’ trust by operating chat groups on popular Chinese messaging app WeChat, where traders posted OTC offers for various cryptocurrencies. The report says that the police have initiated a criminal investigation against the duo and that they are now under arrest. However, the report doesn’t clarify whether the two ran an unauthorised loan scheme or just defrauded the investors of their assets.

WeChat has, however, now banned cryptocurrency transactions in its payments policy.

Yesterday, the CEO of Digital Currency Group suggested that the recent rise in bitcoin’s price can have its roots in the trade war between China and the United States.