Chinese police seize £46M in Ethereum (ETH) and Filecoin (FIL) from fraudsters

Thu 11 Nov 2021 ▪ 12h01 ▪ 3 min read — by Susan McCormack

Chinese police uncovered a Filecoin mining scam and seized Ethereum (ETH), Filecoin (FIL) and local Teda tokens worth about £46.5 million. 31 people were detained. The scammers operated in Shanghai, Shenzhen and other cities.

A multi-level marketing scam

Coingeek reports that the Chinese authorities confirmed that 31 IPFS Union Star Alliance members had been arrested. 

This Shanghai-based Alliance is a leading player in Chinese blockchain industry and includes such giants as Alibaba, Microsoft and Huawei. In April, it was announced that IPFS Union would allocate £1 billion for building the world’s largest Filecoin (FIL) mining facility.

The police have not disclosed any details yet. It is only known that the law enforcement confiscated ¥400 million (about £46.5 million) in ETH, FIL and Teda. The police cracked down on the scam in a number of major cities, including Shanghai, Shenzhen, Wuhan and Xuzhou. The arrested are being accused of a multi-level marketing scam.

IPFS Union denies that its employees were involved in the scamming scheme. Chinese journalist and crypto researcher Colin Wu has posted a tweet claiming that the suspects used illegal funds to purchase cryptocurrencies.

Now the authorities have to figure out whether IPFS Union is directly related to the Filecoin mining scam.

This case is just a new episode in a series of Filecoin-related crimes. Chinese criminals turned their attention to the project after £150 million worth of FIL tokens had been sold. In 2019, a fraudster managed to get £223 million by selling fake tokens to investors.

Hopefully, the Chinese authorities will act promptly to sort out the issue. With the rapidly increasing amount of crypto-related crimes committed, we advise you to be careful when making transactions.

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Susan McCormack

How many crypto nerds does it take to fork an altcoin? I may be a failed comedian, but crypto is no joke! I want to share my knowledge and help others to see the bright future ahead. #buybitcoin

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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