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

Police in Anhui province froze RMB 6 million in assets related to a rug pull with hundreds of victims.

Jan 18, 2022 at 12:24 p.m. UTC
Updated Jan 18, 2022 at 4:52 p.m. UTC

Eliza Gkritsi is CoinDesk's crypto mining reporter based in Asia.

Police in eastern China arrested eight people and froze 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 the Sichuan, Hunan, and Guangdong provinces.
  • 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 to date on crypto trading and mining in September, looking to banish activities that it deems to be dangerous to retail investors and the economy.
  • In June, 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 the investors' consent to an "anonymous pool" where it was laundered, according to the post. The project had successfully passed a security audit, but had actually deployed different code that included a back door, the post said.
  • Investors lost $2.8 billion through rug pulls in 2021, a report by intelligence firm Chainalysis said.
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Eliza Gkritsi is CoinDesk's crypto mining reporter based in Asia.

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Eliza Gkritsi is CoinDesk's crypto mining reporter based in Asia.

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