China Extradites $14 Billion Crypto Pyramid Scheme Leader from Thailand

Highlights:

• Zhang Moumou, leader of the crypto pyramid scheme, was extradited to China.
• China’s “Hunting Fox” group, established with Thailand, facilitated Zhang’s return after a complex process.
• The case highlights successful bilateral cooperation and enforcement against illegal crypto operations.

The Chinese government has announced the extradition of Zhang Moumou, the mastermind behind a large crypto pyramid scheme, from Thailand to China after a prolonged international manhunt. This marks the first extradition from Thailand since the two countries signed the China-Thailand Extradition Treaty in 1999.

The Chinese government announced that it had completed the extradition of the first economic crime suspect from Thailand. His MBI Group issued a digital currency pyramid scheme, developed more than 10 million members, and involved more than 13 billion US dollars.…

— Wu Blockchain (@WuBlockchain) August 23, 2024

Leader of Crypto Pyramid Scheme Captured After Four Years on the Run

China’s Ministry of Public Security announced today that Chinese and Thai authorities have established a special working group, “Hunting Fox,” and extradited Zhang to China on August 20. Zhang, evading capture since 2020, led the infamous MBI Group. Since 2012, this criminal organization has operated a sophisticated online pyramid scheme, deceiving victims with virtual digital currency and promises of high investment returns.

Participants had to pay fees between 700 and 245,000 yuan ($98 to $34,316) to join the platform, with earnings linked to recruiting new members and the amount invested. The scheme ultimately trapped over 10 million people, with total funds surpassing 100 billion yuan ($14 billion).

According to the police announcement, Chongqing authorities, a major city in Southwestern China, began investigating Zhang in November 2020. By March 2021, Interpol’s Chinese branch had issued a red notice for his arrest. In July 2022, Thai police arrested him, and in May of this year, a Thai court ruled to extradite Zhang to China.

Zhang’s Extradition Marks Success in China-Thailand Cooperation

Zhang’s arrest by Thai police in 2022 marked a major breakthrough, but the extradition process proved to be complex. China requested Zhang’s extradition under the bilateral treaty with Thailand. On May 21, 2024, the Thai Court of Appeal finalized the extradition ruling, and the Thai government confirmed it on August 14. This decision paved the way for Zhang’s return to China just days later.

Officials from the Fox Hunting Operation view this as a success, and China has affirmed its commitment to protecting its citizens’ rights and upholding the law. This case is seen as a major success in police cooperation between China and Thailand, serving as a positive example for future extradition cases.

China Targets Illegal Crypto Operations

Although China banned crypto trading on the mainland in 2021, many investors continued attempting to bypass the regulations. In May, Chinese police uncovered an underground bank that utilized the USDT stablecoin for foreign currency exchanges, handling transactions totaling at least 13.8 billion yuan ($1.9 billion). According to the report, authorities have arrested 193 suspects nationwide in connection with the case and have frozen assets worth 149 million yuan.

Earlier this week, China’s top legal authorities classified the use of cryptocurrencies for transferring illicit funds as a form of money laundering in a judicial interpretation. This new definition will make it easier to investigate and prosecute cases related to crypto-linked money laundering. Despite restrictions on cryptocurrency transactions, China classifies crypto as virtual property, providing legal protection to investors and allowing them to hold digital assets.

China Tightens the Reins on Crypto—New AML Rules to Watch

China’s latest move expands its legal toolkit to target crypto-fuelled money laundering.

The new interpretation labels virtual asset trading as a potential laundering method, giving authorities more power to investigate.… pic.twitter.com/kZGH3rPSNT

— Crypto Town Hall (@Crypto_TownHall) August 22, 2024

A recent Chainalysis report shows a drop in overall illicit crypto transactions for 2024 despite a rise in specific crimes like hacking and ransomware. By July, stolen cryptocurrencies totaled $1.58 billion, up 84% from last year.