Suspect Returned for $14B Crypto Scam

A suspect named Zhang has been extradited from Thailand to China for allegedly leading a $14 billion (100 billion yuan) crypto pyramid scheme. He is the first financial criminal to be extradited under the China-Thailand treaty since its inception in 1999.

The Ministry of Public Security in China announced that Chinese and Thai officials have set up a special task force called “Hunting Fox,” which facilitated Zhang’s extradition to China on Wednesday.

Alleged Crypto Fraudster Snared

Even though the ministry only disclosed his surname as Zhang, the South China Morning Post reported that the suspect’s name is Zhang Yufa, also known as Tedy Teow Wooi Huat, who happens to be the founder of MBI Group.

Following an investigation, Teow is suspected of running a pyramid scheme that defrauded many individuals, primarily Chinese nationals, by enticing them to buy MBI’s unauthorized crypto. Teow allegedly headed MBI Group starting in 2012, convincing investors to pay fees from 700 yuan ($98) to 245,000 yuan ($34,300) for membership through crypto.

Authorities say the scheme attracted over 10 million members with promises of significant returns.

It was Chongqing authorities in southwest China who first began investigating Teow in late 2020, leading to Interpol’s China Bureau issuing an international arrest warrant for him months later. Thai police apprehended Teow in July 2022 after he fled Malaysia.

Beijing then filed for his extradition to China, a request that was approved by a Thai court in May and later upheld by the Thai government. Malaysia also requested Teow’s deportation for fraud, but their appeal followed China’s.

The Chinese government has described Teow’s case as “extraordinary” and hopes that his extradition will serve as a precedent for future cooperation on extraditions between China and other nations.

China Escalates Crypto Crackdown

China has enforced strict regulations against crypto speculation since 2017, escalating its crackdown in 2021. This ultimately led to the relocation of mining operations as well as crypto exchanges such as Binance.

The government restricts crypto-related activities, prohibiting financial firms from processing crypto payments and limiting startups from using blockchains to raise funds. Despite these controls, crypto trading remains widespread, with citizens finding ways around the rules.

The Supreme People’s Court and Supreme People’s Procuratorate officially recognized virtual asset transactions, including those conducted through crypto exchanges, as a form of money laundering. This marks the first time China has specifically targeted this asset class in such a way. The new rules are part of a broader crackdown on money laundering, specifically targeting the use of crypto in illegal activities.