Who receives five billion pounds from crypto fraud?
On September 29, Qian Zhimin, a Chinese national, pleaded guilty in a London court to crypto fraud of a sum now worth more than five billion pounds. It was one of the biggest such frauds found by law enforcement anywhere.
Qian will be sentenced in November. The question remains – who will receive this enormous sum? Will it be the 128,000 victims she deceived in mainland China or the U.K. Treasury?
At the Foreign Correspondents Club on Wednesday, Andrew Wheeler KC, a barrister who is head of the Financial Crime Team at 7BR Chambers, London and a specialist in financial crime, gave a detailed explanation of the case.
He said that Qian had committed the fraud between 2014 and 2017 selling 61,000 bitcoin. In March 2014, she launched Tianjin Lantian Gerui Electronic Technology, which offered returns of up to 300 per cent. She funnelled the investors’ money into a crypto exchange and converted it into bitcoin.
When the scheme collapsed and an investigation began in July 2017, she left China using two fake passports and settled in UK.
She joined another Chinese, Jian Wen, who was also living in Britain. The two went around Europe, gradually converting the bitcoin into other assets, such as jewellery and artwork. All went well until they purchased property; someone involved became suspicious and told the police.
British police went to the home in Hampstead, a wealthy district of London. of the two Chinese and found Jiang Wen, whom they arrested. Searching the house, police seized devices containing the 61,000 bitcoin. Qian was not in the house and could not be found.
In 2024. Jiang was convicted of money laundering. Police only arrested Qian in April that year in the northern British city of York.
Wheeler said that the issue of who will receive the bitcoins had not been settled. “If the Crown Prosecution Service can prove it was criminal, the money stays with the UK Treasury,” he said. “There could be asset-sharing with China.”
One group of victims has engaged a British firm, Fieldfisher, to recover their lost money. They want their original investment plus the market profit. “The victims have been without their property for some 10 years now and now entitled to recover from the bitcoin frozen in this jurisdiction,” the law firm said.
The UK High Court could decide that the victims were entitled to recover only the value of the original investment, about 640 million pounds.
Wheeler said that there were three main kinds of crypto fraud. One was converting criminal money into crypto currency, as Qian did.
Another was scamming. “There is scamming in many fields. This kind is not so sophisticated. Scammers send messages demanding money. Or they pretend to be officials or support staff and demand money. Or they use addresses or company names close to real ones.”
A third is hacking, which he said was the most sophisticated. His firm represented a Dutchman who was studying at Oxford University. He stole several million euros in the IOTA cryptocurrency from over 85 victims worldwide from January 2018.
Later that year the Hessen State Police in Germany received several reports from people whose money had been stolen from their cryptocurrency wallets. Police found fraud from the website Iotaseed.io, targeting the users of the IOTA cryptocurrency.
The criminal found a way to gain access to the wallets of the victims and transferred their money to other wallets created with fake IDs. “In 24 hours, all the accounts were emptied and the money laundered through 12 accounts with false names,” Wheeler said.
Police raided the room of the man in Oxford and found it full of computers. Investigating the case was very difficult. “Hacking is the most complicated crypto fraud.”
Initially, the Dutchman said that he knew nothing of the fraud. Then he changed his story, saying that someone had hacked his computer.
On January 27, 2023, the Oxford Crown Court sentenced Wybo Wiersma, from Goredjik in the Netherlands, to 4.5 years in jail for stealing more than US$2.5 million from several individuals worldwide. He pleaded guilty. This followed a five-year investigation by the South East Regional Organised Crime Unit. “This was the first case of this type,” said Wheeler.
“In Britain, scamming is on an industrial scale,” he said. “The authorities are not keeping up. Police do not have enough funds or manpower.”
-
Does Age Matter in Politics? Michael Chugani
Getting old can be depressing. Some people try to hide it with plastic surgery or cosmetics. Others accept that old age is a fact of life. It is true that some age faster than others, either
-
Should HK limit overtourism? Michael Chugani
Driving south from Seattle in the US west coast state of Washington to the neighboring state of Oregon offers a spectacular view of the Pacific Ocean. My family and I did that most summers when I
-
Hongkongers face uncertain future after Farage promise Mark O'Neill
The more than 160,000 Hong Kong people who have emigrated to the UK with a BNO passport face an uncertain future after a dramatic news conference by Nigel Farage, leader of the Reform UK party. On
-
Number of HK migrants to Britain falls Mark O'Neill
The number of Hong Kong BNO migrants to Britain has fallen this year, a result of uncertainty over when they will obtain full citizenship and the difficulties of finding good employment. Latest
-
A Macanese family – from Portugal to the world Mark O'Neill
The Hong Kong Museum of History is holding an exhibition of the Portuguese in the city. They have been an essential part of the society for nearly two centuries. The man who helped to create the
