Yang Bin, China’s former second-richest man, has been sentenced to six years in prison in Singapore for operating a multi-million dollar Ponzi scheme disguised as a cryptocurrency investment operation.
The 61-year-old Chinese-Dutch national pleaded guilty to eight charges ranging from conspiracy to engaging in a fraudulent scheme to operating without a valid work permit and was fined S$16,000 on Aug 26.
According to local media reports, Yang’s fraudulent activity, operating under the name A&A Blockchain Innovation, lured more than 700 investors who lost approximately S$1.1 million of the S$6.7 million allegedly invested between May 2021 and February 2022.
The company claimed to have 300,000 cryptocurrency mining machines that would earn investors a 0.5% daily return. However, no such machines actually existed. Instead, Yang used money from new investors to pay returns to previous investors, a hallmark of a Ponzi scheme.
A story of fraud
This is not the first time Yang has faced legal troubles. He was sentenced to 18 years in prison by a Chinese court in 2003 for tax evasion 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
His troubles began in 2002, when he was appointed by North Korea to oversee economic development in the Sinuiju Special Administrative Region; shortly afterward, Chinese authorities placed him under house arrest on charges of tax evasion.
A sophisticated cryptography system with fictitious returns
Yang’s latest scam is an app that presented fake returns to investors in which the system was centralized, allowing random numbers entered by the system manager to show fake returns of real money.
Deputy Public Prosecutor Wong Shiau Yin said Yang played a major role in the operation and did nothing to compensate the victims. He also said law enforcement authorities recovered S$100,000 from Yang’s home, and he admitted 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 sent Yang to prison for six years, finding him more culpable than his co-defendant, whose court proceedings are ongoing.
Meanwhile, Yang’s lawyer Teo Choo Kee managed to have his sentence reduced slightly by arguing in court that his client deserved a slightly lesser sentence because of his early guilty plea and cooperation with police.
Speaking of monetary terms, the judge said the sums at stake were substantial and the victim’s grievances dated back several years and no restitution had been made to date.
Yang’s punishment has become a resounding warning to all those who have placed their money in fraudulent and unregulated schemes using cryptocurrencies. It has also been a lesson for investors: with the pace of progress and growth of the sector, they must be especially careful and extremely cautious before investing in any type of fund these days.
Featured image of Kohn, Kohn & Colapinto, chart by TradingView
