A man in eastern China has used the recent boom of bitcoin to con nearly 100 million yuan (nearly US$15 million) from 50 investors in three months, state media reported on Sunday. The suspect – identified only by his surname of Zhang, aged in his 20s and from Anhui province – claimed in online posts at the end of last year that he had a reliable supply of bitcoin mining machines, which at the time were in high demand with a single unit of the digital currency trading as high as US$10,000.
Zhang offered the machines for sale for 10,000 yuan (US$1,500) – compared with the then market rate of nearly 30,000 yuan – on the condition that they would be delivered two months after payment, according to the state broadcaster China Central Television (CCTV). China to stamp out cryptocurrency trading completely with ban on foreign platforms
Although take-up of the offer was initially small, investors’ doubts were dispelled by orders being fulfilled, Ms Fu, one of the fraud’s victims, was quoted as saying. Police later found that the suspect had bought the machines at the market rate and made a loss of at least 20,000 yuan on each one.
Tianjin police seize 600 bitcoin mining computers after local grid reported abnormal power usage After defaulting on more than 3,000 orders by mid-January, Zhang disappeared. Zhang turned himself in to the police two months later, saying he could not continue because supply of the machines had slowed and their price had increased. Proceeds of his sales had been spent partly on the mining machines and partly on luxury cars, CCTV’s report stated. Bitcoin is an ‘environmental disaster’ and ‘could bring the internet to a halt’, study says He has been arrested for fraud and awaits prosecution, it reported.
China was one of the most active countries in the trading of bitcoin before trading platforms were banned by the People’s Bank of China in January.