Six Chinese who were moved to join a multinational blockchain investment wechat group were scammed.
“Make $200,000 in just one day” and “Trade at a 330.06% return! Take the money and go see the yacht tomorrow.” ⋯⋯… Seeing such a high-yield investment, do you want to join too? Six Chinese who were tempted to join a multinational blockchain investment micro-group have sued a Chinese New Yorker, Sun, in federal court in the Eastern District of New York because their investment money was “cut into leeks”.
The six plaintiffs are residents of Canada, China, California, Washington State and Georgia. According to their civil complaint filed on April 28, the defendant Sun operated a stock trading academy in New York that taught online courses on U.S. stock trading and speculation and provided investment advice to its members. The six plaintiffs were enrolled in the academy from 2016 through March 2020.
In addition to the online training, Sun also analyzed and commented on the Bitcoin market, his investment strategies, and the returns generated on WeChat. The six plaintiffs were all part of this “blockchain” community. The indictment alleges that Sun “bragged about his bitcoin trading returns almost every day, showing several times the trading returns.
For example, on June 1, 2, 10, and July 22, 2020, Sun announced in a WeChat group that he was “making easy money” and sent out pictures of his bitcoin investments, which won him a lot of applause within the community, and members viewed him as a “god.” On July 27 On July 27th, Sun sent out a message directing people to him, “Boss, if you want to sell or buy bitcoins, remember to ping me (send a text message)”. He also compared his trading gains to “the decline in gold and silver”.
On August 1, 2020, the day before he began raising bitcoin and investment capital, Sun posted two screenshots showing trading gains of 558.9% and 763.75% on his closed positions, respectively. He explained that the operation “yielded 15 bitcoins.”
A little later, he posts another screenshot showing another contract with a trading gain of “330.06%,” which is enough money to get him to the shipyard to see a yacht and buy a boat, saying, “Get the money and go see the yacht tomorrow.” At $11,750 a bitcoin, Sun said he made 20 bitcoins that day, or more than $200,000 in one day.
The next day, Sun began to make investments on behalf of others. Sun posted in the “blockchain” community that he had raised 200 bitcoins by building a large trading position on the Okex platform. He called on “people who don’t have the ability, time or energy to give me their [bitcoins].”
To solicit investments, he said in the “Blockchain” WeChat group that he “guarantees a principal and quarterly dividend of 30% or more, and for (those who have invested) 2 bitcoins, a quarterly (dividend) of 0.6 (bitcoins).”
At Sun’s invitation, each of the six plaintiffs entered into an investment agreement with Sun, who wrote down guarantees and promises for each. The group then transferred money or bitcoins to Sun’s bank account or bitcoin wallet as Sun instructed. Sun also instructed the group that, based on his knowledge of the regulatory environment, they should not write the word “bitcoin” on the remittance memo, but instead use the term “large pancake” instead of bitcoin.
On August 5, 2020, Sun announced in a WeChat group, “Those who joined me yesterday have become rich today.” His self-aggrandizement won the trust and even the admiration of the crowd, and members praised “Dean is so great.
But by the end of 2020, when the plaintiff asked for his investment back, Sun began to cite various reasons: tax issues; identity verification; alleged money laundering problems with the trading platform that led to the suspension of the account; another two weeks; the need to work with the relevant agencies, pending unfrozen, etc. So far, the plaintiff has not received a single penny from Sun’s return.
The suit alleges that Sun’s role is like that of a Futures Commission Merchant (FCM), or Commodity Pool Operators (CPO) in the futures market, but that he has neither been a Futures Commission Merchant (FCM) nor a Commodity Pool Operator (CPO). CPO), but he is neither registered as an FCM nor a CPO, nor is he registered with the FCA as a money services company as required by the Financial Crimes Enforcement Network (“FinCEN”). He was involved in the “virtual currency” business without registering for a Bit License with the New York State Department of Financial Services.
The six plaintiffs asked the court to order Sun to return their investments with interest.
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