Summary:
- Scam Overview: A&A Blockchain Innovation falsely claimed to own 300,000 cryptocurrency mining machines, defrauding over 700 investors.
- Key Figure: Chinese national Wang Xinghong, CTO of the firm, played a pivotal role in the scam, receiving approximately US$100,000 for his involvement.
- Investor Losses: The scheme attracted investments totaling around S$6.7 million from more than 700 investors in Singapore.
- Legal Outcome: Wang pleaded guilty to six cheating charges and received a five-year jail sentence on August 6.
In a significant case of cryptocurrency fraud, the CTO of A&A Blockchain Innovation has been sentenced to five years in prison for his involvement in a Ponzi scheme that swindled investors out of approximately S$6.7 million. The company, which claimed to have 300,000 physical mining machines capable of generating revenue through cryptocurrency mining, was revealed to be a sham.
The scheme, which ran between May 2021 and February 2022, attracted over 700 investors in Singapore. A&A Blockchain Innovation’s Chain Mining Scheme promised a fixed daily return of 0.5% on investments, allegedly backed by cryptocurrency mining operations. However, there were no real mining activities or returns. Instead, the company operated a Ponzi scheme, using funds from new investors to pay returns to earlier investors.
The court heard that Wang Xinghong, a 40-year-old Chinese national, was a “key cog” in the scam. He was responsible for developing the fraudulent mining app, which allowed investors to monitor their supposed daily returns. In reality, the app was designed to display fake numbers inputted by system managers in China, creating the illusion of profitability. Wang received around US$100,000 (S$132,500) for his role in the operation.
The company’s deceptive marketing materials claimed it had secured a 70% ownership stake in 300,000 mining machines located in Yunnan, China, in partnership with Yunnan Shun Ai Yun Xun Investment Holdings. However, these machines never existed.
The primary architect of the scheme, Yang Bin, who incorporated A&A Blockchain Innovation in April 2021, remains under scrutiny. Yang was previously listed by Forbes as China’s second-richest man in 2001, further adding to the scheme’s credibility.
This case serves as a stark reminder of the risks associated with cryptocurrency investments and the importance of due diligence. As the digital asset space continues to grow, potential investors must be vigilant and critically assess the legitimacy of investment opportunities.
Disclaimer:
The information provided on 13Desk is for informational purposes only and should not be considered financial advice. We strongly recommend conducting your own research and consulting with a qualified financial advisor before making any investment decisions. Investing in cryptocurrencies carries risks, and you should only invest what you can afford to lose. 13Desk is not responsible for any financial losses incurred from your investment activities.
