Turkish police busted a Chinese-run crypto scam ring that held 101 people captive as they worked for the illicit operation.

Why it matters: A three-year-long crackdown on cryptocurrency-related fraud in China has made it difficult for scams to run domestically. It seems scammers are still targeting Chinese consumers from abroad.

Indentured scamitude: Police forces raided the gang’s villas, where they found $200,000 in fiat currency, 712 mobile phones, 677 SIM cards, and 112 computers, according to a Google translation of a March 13 Turkish-language report from news agency Demirörenon.

  • Police that that the organization was run by 18 ringleaders, six of whom were detained after the raid.
  • The leaders brought 101 people, including an unspecified number of Chinese nationals, to Turkey on tourist visas to work for the operation. They then took their passports and prevented them from leaving the site. The captive employees earned a monthly salary of RMB 7,000 ($1,000).
  • The scam was run out of nine villas in Silivri, a coastal city near Istanbul, Turkey’s capital.
  • The raid happened after two captives sneaked out at night and alerted authorities.
  • The 101 captives were taken to provincial authorities for “appropriate action,” according to the report.

Crypto pyramid: The operation was advertising a consultancy to help Chinese consumers who were looking to manage their crypto assets. “Hand over your virtual money to us, we will double it and give it back to you,” their online ads wrote, according to the Demirören report. The report does not specify whether the organization in fact doubled users’ money and gave it back to them.

Context: Crypto scams in China were abundant before 2017, when the government started cracking down severely on the industry. Known instances of Chinese nationals running crypto gangs from overseas are few and far between.

  • In December 2020, police in Jiangsu province seized $4 billion in various cryptocurrencies when they busted an international crypto Ponzi scheme.
  • In late January, Croatian authorities exposed scammers claiming they are selling China’s digital currency on Facebook. The digital RMB is currently in closed trials in the mainland.
  • Days after the incident in Silvrisi, a senior Turkish minister said that the country is laying the foundations for a regulated cryptocurrency industry.

Eliza Gkritsi

Eliza is TechNode's blockchain and fintech reporter. When she isn't obsessing over the rise of distributed ledger technology in China, she helps with editing.