A crypto Defi rug pull in China resulted in the seizure of approximately 6 million yuan ($1 million) in cryptocurrency and the arrest of eight persons.
With the start of the new year, Beijing’s war on cryptocurrency continues, with Chinese police freezing roughly 6 million yuan ($1 million) in cryptocurrency and arresting eight persons involved in it. In addition, the public security department of Chizhou discovered a crypto rug pull fraud involving 50 million yuan ($7.8 million), according to a story published in Nikkei Asia.
The deceptive DeFi initiative enticed investors by promising big returns.
In June of last year, Chinese police launched an inquiry after investors lost 590,000 yuan in cryptocurrency. The investigation resulted in the arrest of eight people from various provinces. Authorities also seized luxury automobiles, homes, and other valuable objects allegedly obtained with the defrauded funds from the defendants. The deceptive DeFi program enticed investors with promises of big returns through liquidity swapping. Instead, however, after the investors put their money in, the scammers laundered it through anonymous pools and made off with it all.
Rug pulls have become one of the most popular DeFi con games.
“After the investigation and analysis by the police task force, it was established that this case was a typical case of illegally gaining virtual currency by exploiting blockchain technology,” Chizhou public security said. Rug pulls have become one of the most prevalent DeFi scams, owing to how easy they are to pull off. Rug pulls cost investors almost $2.8 billion last year, according to Chainalysis data. These schemes frequently entice investors with promises of huge returns, and once the pool has amassed sufficient funds, the scammers disappear with the money.