Chinese Police Arrest 8 People Related to $7.8M Rug Pull

Police in eastern China arrested eight people and frozen RMB 6 million ($944,000) related to a RMB 50 million ($7.8 million) rug pull, according to a Jan. 14 post on a local police branch’s official WeChat account.

Police from Anhui province’s Chizhou city conducted the investigation, which led them to three suspects in three provinces: Sichuan, Hunan, and Guangdong.Police also seized “tens of millions” worth of luxury cars and villas that the police said were bought with illegally obtained funds. The suspects eventually confessed to the crime, the police said.China issued its sternest ban on crypto trading and mining in September, looking to banish activities that it deems dangerous to retail investors and the economy.In June 2021, an investor lost RMB 590,000 that he had invested in a crypto token, when the project owners siphoned the money, shut down the website, and were unreachable, Chizhou police said. Hundreds of investors lost RMB 50 million in the scam, the post said.The investigation found that the suspects were transferring investor funds without their consent to an “anonymous pool” where it was laundered, according to the post. The project had succesfully passed a security audit, but had actually deployed different code that included a backdoor, the post said.Investors lost $2.8 billion through rug pulls in 2021, a report by intelligence firm Chainalysis said.

Read more: Police in China’s Zunyi City Bust a $124M Money Laundering Scam

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