China – Man Arrested over $15M Bitcoin Fraud

Promising investors cheap machines, the man disappeared before delivering any of the promised goods.

A man in Eastern has exploited the booming interest in in , sparked by the rising rates, to defraud over 50 investors out of 100M RMB (approximately $15 M) in just under 3 months, reported Chinese state media outlets.

Zhang - Promise to supply bitcoin mining machines
– Promise to supply machines

The suspect, a man in his early 20’s, identified by authorities only by his last name – advertised online that he has a reliable supply of machines, which were in very high demand in the . While the retail price for such machines in can go as high as $5,000, offered his machines for a fraction of that price, at just over $1500 a piece.  The machines were sold to the clients with the promise that they will be delivered within two months of the purchase.

At first, investors were hesitant, due to the ‘too good to be true’ offer, but as the first orders were delivered, and his satisfied customers posted his praises online, more and more investors jumped on board. According to the local , bought the machines at full retail price and sold them at a loss of 20,000 RMD ($3000) apiece.

Zhang quickly defaulted on his orders, taking his clients’ money and failing to deliver the they have purchased. Following a substantial number of complaints from his , the local were quick to act and Zhang.

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