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Chinese Police Busted 300 Million Yuan Crypto Scam HeroChain

Chinese Police has recently busted an RMB300 million crypto exit scam that amassed over 300 million yuan ($46 million) with 21 suspects involved.

A gang of over 15 suspects involved in the scam has been arrested and other 6 still at large, according to local police in Hengyang, a city of Hunan province in south central China.

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The accused reportedly established a gambling-focused blockchain named Hero Chain and preyed on vulnerable investors amid a climate of heightened enthusiasm on crypto/blockchain investment.

As the blockchain startup got their token HEC listed on a crypto exchange, victims didn’t wake up until they found the firm suddenly took down their website and disappeared.

In just two months, the purported blockchain project managed to solicit investments nearly 40,000 ETH (approximately 300 million yuan, or $46 million, calculated by the market price at that time) from hundreds of victims. The majority of the raised ETH has been distributed in dividends to the team members and promoters, only 20 million yuan ($3 million) was confiscated by police.

The arrest is another crackdown on alleged cryptocurrency fraud in China as law enforcement in the country have been beefing up efforts to battle illegal fundraising.

China’s push to crack down on crypto scams has brought with it a serial of arrests within the country. Earlier this year, police in China’s Henan has busted a 1.3 billion yuan ($193 million) crypto pyramid scheme in January; Last year, Chinese police in Xi’an arrested the founders of faux blockchain platform DBTC, which amassed over $13 million within a fortnight from some 13,000 victims; and the notorious OneCoin scam which amassed €1.9 billion.

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