Shandong Province: Major Tether Ponzi Scheme Busted187

On August 29, 2022, officials in Shandong Province, China, announced the successful bust of a major Ponzi scheme involving the cryptocurrency Tether (USDT). The investigation, initiated in March 2022, uncovered a complex network of illicit activities that allegedly defrauded over 100,000 investors of more than 10 billion yuan (approximately $1.4 billion).

According to the investigation, the criminal organization behind the scheme operated through a series of companies and online platforms, enticing investors with promises of guaranteed returns on Tether. The investors were reportedly offered varying rates of return, ranging from 5% to 15% per month. To maintain the illusion of profitability, the organization paid out interest and dividend payments to early investors using funds from new investments.

As the scheme gained traction, the organization expanded its operations, establishing offices in cities across China and recruiting a vast network of agents to solicit new investors. To facilitate the inflow of funds, the organization created a sophisticated system of cryptocurrency exchanges, payment processors, and shell companies that allowed them to obscure the flow of money and evade detection.

However, the investigation revealed that the majority of the so-called Tether being traded on the organization's platform was not genuine. Instead, the organization allegedly created its own counterfeit Tether, known as "CW Tether," and used it to inflate the value of their operations and pay out investor returns. The CW Tether had no legitimate backing or value and was essentially worthless.

As the investigation progressed, authorities identified over 700 suspects involved in the scheme, including the ringleaders and key operatives. Law enforcement officials executed simultaneous raids on multiple locations, seizing assets, freezing bank accounts, and arresting numerous individuals. The investigation also revealed that the organization had laundered a significant portion of the stolen funds through overseas accounts and investments.

The successful bust of this major Ponzi scheme sends a clear message that law enforcement agencies in China are committed to combating cryptocurrency-related fraud and protecting investors. The case highlights the importance of due diligence and caution when investing in cryptocurrencies and reminds investors that not all digital assets are legitimate.

Investors should be aware of the risks associated with cryptocurrency investments and only invest in reputable projects with proven track records. They should also be wary of any investment schemes that promise unrealistic returns or guaranteed profits.

In addition, authorities urge individuals who have been victimized by the Tether Ponzi scheme to contact law enforcement and report their experiences. Cooperation from victims is essential in bringing the perpetrators to justice and recovering stolen funds.

2024-11-10

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