A recent incident in Singapore has left investors in a cryptocurrency scam with losses totaling $1.1 million. The case serves as a stark reminder of the risks involved in investing in fraudulent digital currency ventures.
Tech Executive Jailed for Leading Crypto Scam
As per reports by Channel News Asia (CNA), the chief technology officer of a well-known cryptocurrency investment company has been sentenced to five years in prison for his part in a scam that defrauded investors of $1.1 million.
The company, led by Chinese entrepreneur Yang Bin, attracted $6.7 million in investments by falsely promising high returns through its cryptocurrency mining operation.
A&A Blockchain Innovation, founded in April 2021, introduced its Chain Mining Scheme, enticing investors with a fixed daily return of 0.5% from cryptocurrency mining. The company claimed to have acquired a major stake in 300,000 mining rigs in Yunnan, China, capable of mining valuable cryptocurrencies like Bitcoin and Ethereum.
However, investigations revealed that the company had no such agreements or mining equipment. Instead, it was operating a Ponzi scheme, using funds from new investors to pay off earlier ones.
A custom app developed by Wang Xinghong was utilized to manipulate data and deceive investors about their returns.
Legal Action and Ongoing Investigations
Wang Xinghong, responsible for creating the fraudulent app, is facing charges for his role in the scam. While not the mastermind, Wang’s technical skills were crucial in sustaining the fraud.
Wang was tasked by Yang to develop the mining app. He was aware of the lack of real mining activities and returns. He designed the app to allow Chinese system managers to input false numbers reflecting investor returns. Wang oversaw the app and managed a team in China, receiving approximately US$100,000 from his involvement.
Although Wang may spend four to five years in prison, his defense lawyers seek a shorter sentence. The police are actively investigating A&A and its partners in light of the scam.
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