🌋 Chinese Student Charged with Issuing Fake Cryptocurrency
posted 6 Jun 2024
Chinese law enforcement has initiated its first criminal case related to the launch of cryptocurrency tokens, accusing student Yang Qichao of creating fake digital assets. Although the case resembles a common Rug Pull scam, he was charged under a different count due to legal ambiguities.
Investigations reveal that Yang launched his Blockchain Future Force (BFF) token on the BNB Chain blockchain, infusing it with initial liquidity of 300,000 USDT and 630,000 BFF. Mere seconds after a user named Luo invested $50,000 in BFF, Yang withdrew the funds, drastically dropping the token's price.
Luo later tracked down Yang Qichao through a mutual WeChat friend and requested compensation for his losses, which Yang refused. Luo's subsequent report of virtual asset theft to the Public Security Office in a high-tech industrial development zone led to the criminal investigation.
The district court concluded that Yang Qichao issued fake coins and exploited the popularity of the Blockchain Future Force DAO, which was planning its own token launch. As a result, he was sentenced to 4.6 years in prison, though he has appealed the decision.
Yang's defense argued that the coin’s smart contract was unique and that withdrawing the liquidity did not violate the trading platform's terms. They also claimed that the token’s price increased post-investigation, which could potentially allow Luo to recoup or even profit from his initial investment. However, the court has not yet accepted these arguments.
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