While the Supreme Court of China is working on strengthening the crypto regulation, an upsurge of CBDC-related scams has been reported.
The Supreme Court of China has moved to strengthen property laws with a view to protecting crypto assets ownership in the country. In a release that mentioned digital currencies, property laws and data, the court stated that its aim is “promote the improvement of a modern property rights system with clear ownership.”
The court’s move may not be unconnected with the rise in cryptocurrency-related crimes in the country.
Prior to the release of China’s central bank digital currency, an upsurge of scams trying to lure innocent citizens has been reported.
Upsurge in Crypto Scams in China
An investment scam has been reported in some major cities in China as a result of the country’s central bank digital currency. The authorities had announced already in 2019 that tests will be carried out on the Central Bank Digital Currency (CBDC) in the country. Cities have not started testing the digital currency but fraudsters are already taking advantage of the news. These fraudsters are operating by impersonating CBDC test groups.
According to Tencent QQ, the fraudsters are asking investors to sign up for a new debit card. They promise that the money invested, which is a minimum of 10,000 Yuan (14.30 USD) will give seven-folds returns in a short time. Some of the victims are promised returns of 60,000 Yuan (8576.94 USD) on the initial amount invested.
No Approval for Tests
Shenzhen, Xi’an, Chengdu, and Suzhou have been highlighted as cities where the scam is most prominent. It should be noted that the CBDC tests will eventually be carried out in these cities. The tests are being delayed because the People’s Bank of China has not given its approval for the tests to commence. Fraudsters impersonating CBDC test groups are taking advantage of the delay and people’s readiness for the digital currency.
Local banks are at high alert as these schemes target their customers and can have adverse effects on transactions. They are working hand in hand with authorities to put a stop to crypto-related scams.
The fraudsters have taken a step further in making the scheme believable by developing an app for the victims to keep track of their ‘investments’. The app is just a clever front to keep the scheme going and involve even more unsuspecting victims. The money disappears either way.
It should be noted that the PBoC has stated there will be an official announcement prior to the beginning of the tests to launch the CBDC. Until announcements are made via appropriate channels, CBDC tests in circulation should be considered as scams. No such announcement has been made at the time of reporting. Once the announcements have been made, testing will begin in major cities.
Crypto scams are becoming rampant in China. One of such schemes was recently infiltrated by the authorities in Wenzhou. The scheme at the time of its infiltration had amassed over 100 million Yuan (14.31 million USD). The money was seized along with a number of expensive vehicles and houses, all worth a lot of money.
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