New Chinese scam estimated to have stolen over $1B worth digital assets

• A new Chinese scam, WOKOTEN, has allegedly defrauded over 7,00,000 users and stolen over $1 billion worth digital assets. 
• The trial began recently in the People’s Court of Binhai Country against six defendants accused of operating the scam.
• One of the scam’s operators is purportedly linked to PlusToken – a multi-billion Ponzi scheme from 2019. 

Recent Chinese reports have revealed new crypto fraud, dubbed WOTOKEN, that allegedly scammed over 700,000 users and stole more than $1 billion worth digital assets. One of the scam’s operators is purportedly linked to PlusToken – a multi-billion Chinese Ponzi scheme from 2019. 

The WOTOKEN trial began recently in the People’s Court of Binhai Country, Yancheng City, against six defendants who are accused of operating the scam. Specifically, the court blamed them for organizing and managing multi-level marketing (MLM) activities, covering up false stories, providing misleading information, concealing income and crimes. 

Chinese officials first learned about the WOTOKEN project in 2018. It operated without any actual business activities. However, it did send out marketing messages that claimed that it was a smart wallet for crypto, which generated automatic profits to users without requiring their involvement. Owing to its MLM-based operations and false promises of quick returns, WOTOKEN is compared to another similar fraudulent scheme, PlusToken, which also came from China. Coindesk advisor, Dovey Wan, said that one “core criminal involved in WOTOKEN is formerly key scammer at PlusToken.”

Although WOTOKEN operated only from July 2018 to October 2019, it had a suspiciously high number of total hierarchical levels – 501, as per the reports. Within this period, 715,249 people registered on its platform. The scammers have managed to steal 46,000 Bitcoins, over 2 million Ethers, 292,000 Litecoins, 56,000 BCH, 684,000 EOS and large quantities of several other digital assets. Ultimately, local reports calculated that the total amount of money lost through the scam equaled 7.769 billion yuan (nearly $1.1 billion).