Chinese Businessman With Ties to Steve Bannon Arrested, Charged With Fraud, Including $500M Crypto Scam

Guo Wengui is accused of engaging in multiple schemes that defrauded investors out of $1.4 billion.

AccessTimeIconMar 15, 2023 at 7:48 p.m. UTC
Updated Mar 15, 2023 at 8:44 p.m. UTC

Exiled Chinese businessman Guo Wengui was arrested in New York on Wednesday morning and charged with fraud for allegedly orchestrating a series of fraudulent schemes that bilked retail investors out of a collective $1.4 billion.

Hours after his arrest, Guo’s luxury penthouse apartment on Manhattan’s Upper East Side caught fire, burning for two hours before firefighters were able to put out the blaze. The Federal Bureau of Investigation (FBI) is reportedly investigating the fire. The 15-room apartment is currently on the market for $32.5 million.

Out of Guo’s four alleged schemes, three were related to GTV Media Group, the Chinese social media company formed in April 2020 by Guo and Steve Bannon – a longtime ally and former adviser to former U.S. President Donald Trump. The three alleged schemes raised an estimated $857 million.

Bannon was arrested on Guo’s yacht, the 152-foot-long Lady May, in August 2020 and charged with conspiracy to commit wire fraud and money laundering in connection to a crowdfunded effort to build a border wall between the U.S. and Mexico. Bannon has not been charged with any wrongdoing in connection with GTV.

Guo’s fourth alleged scheme – which the U.S. Securities and Exchange Commission (SEC) said in a separate civil complaint raised $500 million from retail investors – was an unrelated crypto venture called H-Coin, or Himalaya Coin. Beginning in October 2021, Guo founded and promoted H-Coin, telling his social media followers that the currency was 20% backed by gold and promising to cover “100% of investment losses attributable to H-Coin.”

Four months later, in February 2022, Guo filed for bankruptcy protection, claiming assets valued between $50,000 and $100,000 and liabilities of up to $500 million. Despite his claims of poverty, the Department of Justice (DOJ) announced Wednesday that it seized over $630 million of alleged fraud proceeds from 21 different bank accounts controlled by Guo between September 2022 and March 2023.

Before declaring bankruptcy, Guo lived lavishly – a lifestyle prosecutors say was funded by unsuspecting investors.

“[Guo] is charged with lining his pockets with the money he stole, including buying himself, and his close relatives, a 50,000 square foot mansion, a $3.5 million Ferrari, and even two $36,000 mattresses, and financing a $37 million luxury yacht,” U.S. Attorney for the Southern District of New York Damian Williams said.

Guo’s U.S. legal troubles are not his first. In 2014, the former billionaire fled his native China in anticipation of fraud charges, and became a vocal critic of the Chinese Communist Party. Guo, who is wanted by the Chinese government, filed an application for political asylum in the U.S. in 2017. That application remains pending.


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Cheyenne Ligon

Cheyenne Ligon is a CoinDesk news reporter with a focus on crypto regulation and policy. She has no significant crypto holdings.

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