Chinese man arrested over ‘US$15 million bitcoin fraud’
Sale of mining machines for less than market rate attracted investors to hand over money before the suspect began to default on orders, it is claimed
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).
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.