Yang Bin, China’s former second-richest man, has been sentenced to six years in prison in Singapore for running a multimillion-dollar pyramid scheme disguised as a crypto investment operation.
The 61-year-old Chinese-Dutch national pleaded guilty to eight charges ranging from conspiracy to participate in a fraudulent scheme, operating without a valid work permit and was fined S$16,000 on August 26.
According to local media reports, Yang’s fraudulent activitiesoperating under the name A&A Blockchain Innovation, attracted over 700 investors who lost approximately S$1.1 million between May 2021 and February 2022 out of the supposed S$6.7 million invested.
The company claimed to own 300,000 cryptocurrency mining machines that would earn investors a 0.5% daily return. However, such machines did not actually exist. Instead, Yang used the money from new investors to pay returns to previous investors, a hallmark of a Ponzi scheme.
A history of fraud
This isn’t the first time Yang has faced legal trouble. He was sentenced to 18 years in prison for tax evasion by a Chinese court in 2003 and served part of his sentence before being released in 2016.
Total crypto market cap at $2.19 trillion on the daily chart: TradingView.com
The troubles began in 2002, when he was appointed by North Korea to oversee economic development in the Sinŭiju Special Administrative Region. Shortly afterwards, he was placed under house arrest by Chinese authorities on charges of tax evasion.
Advanced Crypto Scheme With False Returns
Yang’s latest scam involves an app that showed fake returns to investors. The system was centralized, allowing the system administrator to input arbitrary numbers that showed fake returns on real money.
According to Deputy Public Prosecutor Wong Shiau Yin, Yang played a key role in the operation and did not pay any compensation to the victims. It was also alleged that law enforcement authorities had recovered S$100,000 from Yang’s home and that he had admitted that the money belonged to the investors.
The State Courts in Singapore. (File Photo: CNA/Jeremy Long)
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Locked up
District Judge Brenda Chua sentenced Yang to six years in prison because he owed more than his co-defendant, whose case is still pending.
Meanwhile, Yang’s lawyer, Teo Choo Kee, managed to reduce his sentence slightly by making it clear to the court that his client was entitled to a slightly lighter sentence because of his early guilty plea and his cooperation with police.
When discussing the monetary terms, the judge said that the sums were considerable and that the victim’s grievances had been ongoing for years. To date, no compensation has been paid.
Yang’s punishment became a loud warning to all those who had invested their money in unregulated and fraudulent cryptocurrency schemes. This has also been a lesson to investors that with the advancement and growing pace of the industry, they need to be extra cautious and extremely careful before investing in any fund these days.
Main image by Kohn, Kohn & Colapinto, chart by TradingView