Chinese Police arrested a group of cryptocurrency scammers following a raid in Xuchang City. The bust, which took place five months ago, was only publicized this week after a story on CCTV News.

During the break-in, police seized cash valued at $1.3 billion Yuan (approximately $193 million). Apparently, the source of the money was a fraudulent scheme run by a company known as ‘I am A Clown.’

I am A Clown masked itself as a social networking platform based in AI, big data and distributed ledger technology. In the actual sense, it was a typical multilevel marketing scam. The company used the craze around blockchain technology to lure unknowing investors into their pyramid scheme.

According to CCTV News, the police conducted a two-month investigation after receiving tip-offs from unnamed sources. The fraudsters, believed to be residing outside China, were using high returns to coax clients into investing with them. so far, the police have apprehended 27 individuals to assist with further investigations.

Yuan Xianchao, an officer at the Economic Crimes unit of Xuchang City police, explained that I am A Clown acquired most of its members through referrals made by their affiliates. The new members would pay registration fees with the hope of earning astronomical profits within a short time. Also, the company was registered under a shell corporation known as Shen located at Hangzhou.

Liu Bo, a member of the Xuchang City police department, disclosed that the criminals withdrew hundreds of thousands on a daily basis. To avoid arousing suspicion, the scammers cashed out at different points around the country and then drove to Zhejiang Jinhua. It was from this location that they laundered the money.

Fraudulent projects are still a nightmare to investors in the crypto space. In 2018, investors lost digital assets valued at $1.7 billion to hackers and fraudsters.

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