China extradites mastermind behind $14 billion crypto pyramid scheme

The Chinese government announced the extradition of the mastermind behind a multi-billion-dollar crypto pyramid scheme from Thailand, according to an Aug. 23 statement.

The Chinese Ministry of Public Security identified the suspect as Zhang, who was extradited on Aug. 20. Zhang is accused of leading a $14 billion crypto pyramid scheme.

Zhang allegedly began his operation in 2012, attracting investors to his ‘MBI Group’ with promises of high returns. Victims paid between 700 Yuan ($98) and 245,000 Yuan ($34,300) in cryptocurrencies to join the scheme.

The group amassed over 10 million members and accumulated over 100 billion Yuan, valued at approximately $14 billion.

A Chinese government spokesperson said Zhang’s extradition demonstrated the authorities’ determination to safeguard the rights and interests of citizens.

Meanwhile, the extradition follows a nearly four-year investigation by Chinese police initiated in November 2020. Interpol’s China Bureau issued a red notice in March 2021, leading to Zhang’s arrest in Thailand in July 2022.

Further, Zhang’s arrest and extradition resulted from a joint effort between China and Thailand under the “Fox Hunting Operation.” A Thai court approved Zhang’s extradition to China in May, making him the first criminal suspect extradited under the China-Thailand treaty since 1999.

This extradition action reflects China’s continued efforts to crack down on the digital asset industry.

Over the years, the country has consistently distanced itself from the industry. The authorities have enacted regulations restricting crypto trading and prohibiting financial institutions from dealing with digital assets.

However, some Chinese citizens still find ways to access the industry despite these strict regulations. A Chainalysis report pointed out that the country received over $75 billion in crypto between July 2022 and June 2023.

Meanwhile, the crypto community is beginning to speculate that China may be warming up to the industry thanks to several developments, including the approval of spot Bitcoin exchange-traded fund (ETF) products in Hong Kong.

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