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Prosecutors in Taiwan indicted seven bitcoin traders for allegedly operating a sham crypto investment scheme that bilked $51 million from more than 1,000 investors.
The ringleader was a 47-year-old man whose surname is Lin, Focus Taiwan reported. The alleged scammers were charged with multiple violations of Taiwanese banking and business laws.
The group of seven were arrested in June 2018 but were formally indicted this week. Officials say the group defrauded about $51 million from 1,000 people across Taiwan and China since 2016. They fraudulently wooed investors by making false promises of exorbitant returns.
The sham bitcoin scheme promised returns of up to 355% after a year of investing, according to the Taiwanese Investigation Bureau.
Prosecutors say most investors never received any returns on their investments until February 2018. By April 2018, they stopped receiving returns altogether. The Taiwanese government has taken steps to regulate cryptocurrencies to stem the use of bitcoin for money-laundering and terrorism funding.
In September 2018, the Taiwanese Cabinet approved amendments to the Money Laundering Control Act and the Terrorism Financing Prevention Act. The goal is to tighten supervision of the banking industry and the crypto market.
In October 2018, an official underscored that Taiwan would not follow the examples of China and South Korea by instituting an outright ban on crypto activity.
In the United States, there is similar skepticism of mass bitcoin adoption due to lingering concerns among regulators.