With the start of the new year, Chinese officials froze roughly 6 million yuan ($1 million) worth of cryptocurrency and detained eight people engaged in it.
According to a source in Nikkei Asia, the public security department of Chizhou found a crypto rug pull fraud worth 50 million yuan ($7.8 million). In June of last year, an investor lost 590,000 yuan in cryptocurrency, prompting the authorities to launch an inquiry. The investigation resulted in the arrest of eight people from various provinces. The police also confiscated luxury automobiles, houses, and other valuable objects allegedly acquired with fraudulent funds from the suspects.
Rug pulls have become one of the most common scams in the decentralised finance (DeFi) space, as it is comparatively easier to pull off. These types of scams often lure investors by promising high returns, and once the pool has enough capital, the scammers run away with all the money. According to the Chainalysis analysis, “Rug pulls have emerged as the go-to scam of the DeFi ecosystem, accounting for 37 percent of all cryptocurrency scam earnings in 2021, compared to just 1 percent in 2020.”
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