As an analyst with extensive experience in the crypto industry, I find this case both intriguing and concerning. The rapid growth and innovation in the blockchain and cryptocurrency space have opened up new opportunities for individuals to make significant financial gains. However, they also present unique risks that require a deep understanding of the technology and the regulatory landscape.
A Chinese student at a university has been given a prison term longer than four years, marking the seemingly first instance of cryptocurrency scam related to liquidity withdrawal in China.
College student Yang Qichao has been given a prison sentence of approximately 4.6 years for defrauding investors through his cryptocurrency token BFF, which was created on a blockchain outside China. As reported by The Paper, the prosecution claims that after gathering an investment of $50,000 in USDT, a stablecoin issued by Tether, Yang swiftly withdrew the token’s liquidity, leading to the complete loss for the investor.
Prosecutors allege that Yang issued a counterfeit BFF token bearing the same name as Blockchain Future Force’s (BFF) authentic token to deceive investors. The authorities assert that Yang enticed Luo, the victim, to invest by initially contributing $300,000 to BFF’s liquidity pool. Subsequently, Luo traded $50,000 worth of Tether’s USDT for approximately 85,316 BFF tokens. However, within mere seconds, Yang withdrew the liquidity from the pool, leading to a significant devaluation of Luo’s BFF tokens.
According to Yang’s defense, the use of the BFF token in question was authentic, with a distinct and unchangeable contract address. Both parties engaged in the transaction were knowledgeable crypto traders, who were well-aware of the inherent risks. Furthermore, withdrawing liquidity is a typical practice in cryptocurrency trading and does not violate the platform’s regulations.
Furthermore, the defense pointed out that the value of BFF tokens had surged since the occurrence of the incident. Now, Luo owns a total of 72,381.7198 BFF tokens which are equivalent to more than $64,000 in USDT.
Prosecutors argued that Yang’s hasty removal of funds was evidence of deceitful behavior intended to swindle Luo. The Chinese judiciary subsequently convicted Yang of fraud, ordering him to serve prison time and pay a fine equivalent to $4,140.
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2024-06-06 12:53