- Chinese law court has passed a final verdict, sentencing crypto Ponzi scheme operators in jail.
- The masterminds gained over $1 billion from their WoToken pyramid scheme.
Ponzi schemes are one other strategy used by fraudsters to defraud unsuspecting investors of their hard-earn money. Most recently, a group of four persons was sentenced by a Chinese law court for operating a billion-dollar crypto Ponzi scheme. They lured in several investors within a limited time, as they promised high returns through their WoToken trading platform.
Another crypto Ponzi scheme halted
Recent information confirmed the sentencing of the four persons who planned and operated a crypto Ponzi scheme under a trading platform called WoToken. They are, namely, Li Qibing, Wang Xiaoying, Gao Yudong, and Tian Bo. Following the final verdict issued by a law court in Yancheng yesterday, the WoToken masterminds are expected to serve for about 2.5 to 8.8 years behind bars.
Besides the sentencing, a smaller portion of the funds gained through the crypto Ponzi scheme has been confiscated. As reported, the local authorities seized about $60 million. The money will be handed over to the state treasury.
The WoToken operators reportedly began the crypto Ponzi scheme in August 2018, which lasted until October last year. According to the report, they perpetrated the multi-layer pyramid scheme using their platform’s native token dubbed WOR. As it’s common with other reported cases of a pyramid scheme, the WoToken masterminds promised investors high returns, which were partly delivered through the funds from new investors.
It was estimated that a total of 715,249 Chinese investors joined the trading platform. These investors generated about 46,050 Bitcoin (BTC), 6,841797 EOS, 2 million Ether (ETH), 286 million Tether (USDT), and 292,590 Litecoin (LTC). These cryptos made a combined valuation of $1.1 billion during the time of the accumulation.