September 30, 2022

China Police Makes Rug Pull-related Arrests Amid Total Crypto Ban

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China police continues to make crypto-related arrests

No less than 8 people have been apprehended by China authorities in relation to a RMB 50 million( $7.8 million) rug pull. The statement was made through the main WeChat account of regional authorities department on January 14, with additional confirmation that another RMB 6 million ($944,000) has also been frozen by the authorities.

China Police Apprehends Rug Pull Supects

Following numerous reports by victims and after a series of investigations by the Police from Chizhou city, Anhui province, three suspects have now been detained from three various provinces: Hunan, Guangdong, and Sichuan.

The authorities also seized from these suspects, high-end automobiles and estates that are worth “10s of millions” of dollars, and are thought to have been gotten from their illicit negotiations and naturally the funds made thereof.

Nevertheless, details gathered from the investigations has now exposed how the suspects had the ability to pull off the carpet pull. They (the suspects) were moving funds from investors’ accounts to an “confidential swimming pool” without their consent. And, according to the post, it was from this swimming pool that the funds were then laundered.

Surprisingly, the entire job had actually currently been inspected before. But even though it passed the security audit, new findings reveal that the creators had deployed various code that included a backdoor.

Suspects have since admitted to the criminal activity, states the cops.

Yet Another Justification For China’s Crypto Ban

China is among the countries that has released a straight-out restriction on all forms of crypto-related activities including trading and mining. The nation made the announcement in September, aiming to curb activities that might possibly harm retail financiers and the economy. And scenarios like the one summed up in this article just goes to even more prove why China may be maintaining such a strong stance as it worries crypto.

In June 2021, a single investor lost his entire RMB 590,000 to a typical rug pull when the task owners moved the money, closed down the site, and went missing out on, says Chizhou police. According to the post, over RMB 50 million were lost in the scam.

Meanwhile, Chainalysis reports also confirm that roughly $2.8 billion was lost to rug pulls by investors in 2021 alone.

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