Recently, after an international manhunt, China successfully extradited from Thailand a suspect involved in a massive cryptocurrency pyramid scheme worth $14 billion. This major action has attracted widespread attention from the global cryptocurrency community and law enforcement agencies.
According to the statement, on the evening of August 20, 2024, with the strong assistance of relevant Chinese departments, the Chinese Embassy in Thailand and Thai law enforcement agencies, the "Fox Hunting Operation" working group of the Chinese Ministry of Public Security successfully extradited Zhang Moumou (Zhang Yufa), a major economic crime suspect suspected of organizing and leading pyramid selling activities, from Thailand to China. This case is the first economic crime suspect extradited from Thailand by China after the China-Thailand Extradition Treaty came into effect in 1999.
According to the Ministry of Public Security of China, since 2012, the MBI Group, headed by the criminal suspect Zhang, has been issuing virtual digital currency and requiring participants to pay fees ranging from RMB 700 (US$98) to RMB 245,000 (US$34,300) to obtain platform membership. It has used high rebates as bait and used the number of members developed and the amount of funds invested as a method of remuneration or a basis for rebates to carry out illegal network pyramid selling activities. Over the years, the scam has lured more than 10 million investors and has accumulated more than RMB 100 billion (US$14 billion). The scale and complexity of the MBI Group's business have made Zhang one of China's top economic crime suspects.
According to an insider, MBI actually absorbed NT$500 billion in funds, making it the originator of the transnational pyramid scheme in Malaysia. Similar organizations such as Huayinghui, Fentouqu, and ACE are no match for it. Moreover, the most powerful part of MBI is its cash-out mechanism. To realize cash-out, participants must assist the company in speculating on virtual currency three times, thereby artificially pushing up the currency value. Through this three-in, three-out transaction model, MBI achieved the compound interest effect, that is, the self-value-added of funds, thus creating the so-called "500 billion pyramid scheme".
In addition, the investigation of Zhang began in November 2020, led by the Chongqing police in China. In March 2021, the Interpol China National Central Bureau issued a red notice for Zhang. On July 21, 2022, the Thai police arrested Zhang. Subsequently, China made an extradition request to Thailand in accordance with the bilateral extradition treaty. On May 21, 2024, the Thai Court of Appeal made a final ruling to extradite Zhang to China. On August 14, the Thai government made an administrative decision to support the final ruling of the court, and finally completed the extradition on August 20.
Zhang's arrest and extradition are the result of a joint operation between China and Thailand under the framework of the "Fox Hunt Operation". A relevant person in charge of the "Fox Hunt Operation" Office of the Ministry of Public Security said that the successful extradition of Zhang showed the Chinese government's firm determination and will to safeguard the rights and interests of citizens and defend the dignity of the law. It is a major achievement of China-Thailand law enforcement and judicial cooperation, and has a milestone significance for consolidating and deepening the law enforcement and judicial cooperation between China and Thailand. It will also play a positive role in demonstrating the extradition cooperation between China and other countries in the future.
It is worth noting that China banned cryptocurrency trading activities on the mainland in 2021, but many investors still try to circumvent the rules. In May this year, Chinese police cracked down on an underground bank that used USDT stablecoins for foreign currency exchange, involving transactions of at least 13.8 billion yuan (US$1.9 billion). Earlier this week, China's top judicial department listed the use of cryptocurrency to transfer illegal funds as a means of money laundering in a judicial interpretation, making it easier to investigate and prosecute cryptocurrency-related money laundering cases.
It can be seen that although China has strictly banned cryptocurrency trading since 2021, the public is still vulnerable to cryptocurrency investment scams. So although cryptocurrency trading is restricted, the Chinese government still regards cryptocurrency as virtual property and provides legal protection for investors to hold digital assets.
In general, this extradition operation not only reflects China's continued crackdown on the digital asset industry, but also triggers people's thinking about cryptocurrency regulation. Although cryptocurrency has the characteristics of decentralization and anonymity, these characteristics also provide opportunities for criminals. Therefore, governments should strengthen the supervision of cryptocurrencies and formulate more complete laws, regulations and policy measures to protect the rights and interests of investors and the stability of the market. In addition, this incident is also a warning to the global cryptocurrency industry. It once again reminds people to be vigilant in the investment process and not to be fooled by false promises and attractive returns.
