CIB announces NT$200 million cryptocurrency scam investigation

Taipei, Dec. 14 (CNA) The Criminal Investigation Bureau (CIB) on Thursday detailed the arrest of 10 suspects after more than 100 victims were scammed out of NT$200 million (US$6.39 million) in a Tether cryptocurrency fraud case in Taipei and New Taipei.

In a statement, the bureau said it first became aware of the fraud earlier this year, when reports indicated that a physical crypto shop in Taipei’s Wanhua District was in fact being used by gangsters to launder money.

It was found that the fraud ring was led by a 27-year-old man surnamed Sun (孫), who set up the first fake crypto shop in March and instructed ring members to attract victims by encouraging them to join an investment chat group that offered courses on daily stock market movements and related analysis, according to the CIB.

The ring even sent participants gift certificates and birthday cakes to gain their trust, the bureau added.

As the gangsters were pretending to be stock market “tutors,” they encouraged victims to purchase cryptocurrency stablecoin Tether at designated shops, where staff asked them to sign a liability disclaimer in an attempt to avoid legal responsibility.

The “investors” were unaware they were being defrauded until they discovered the crypto exchange was fake and were unable to log into their supposed crypto wallet, the police said.

According to the CIB investigation, police found there were three physical crypto shops in Taipei and New Taipei, located in Taipei’s Wanhua and Neihu districts and New Taipei’s Luzhou District.

Currently, more than 100 victims have been identified and their losses have been estimated at over NT$200 million. One retired man lost around NT$40 million over a five-month period, the police said.

According to the task force, most victims found the crypto shops trustworthy because they were brick-and-mortar, when in fact they were being used as cover for illegal activity.

Multiple locations connected to the fraud scheme in Taipei and New Taipei were raided on Oct. 18 and Nov. 20, respectively, with 10 suspects arrested, including Sun.

The police also seized thousands of top-up cards, NT$29,000 in cash, 15 bags of ketamine (weighing 70 grams), machetes and baseball bats found in the premises. In addition, it was also revealed that the suspects tried to destroy evidence by throwing phones and laptops out of the buildings during the raids.

After being questioned by police, the 10 suspects were handed over to Taipei District Prosecutors Office on suspicion of fraud, money laundering and organized crime, and were subsequently released on bail of NT$50,000 to NT$300,000, the police said, adding that the investigation is ongoing.