Man behind crypto Ponzi scheme where victims lost $1.1m gets jail, fine

A mastermind of an elaborate scam ran a firm offering cryptocurrency investment schemes, in which 12 investors parted with more than $1.8 million in total.

In reality, the company, identified as A&A Blockchain Innovation, was operating a Ponzi scheme with no actual profit-generating business, and some investors were paid “returns” with money from the other investors.

Multiple investors did not receive such “returns” and lost a total of around $1.1 million.

On Aug 26, Dutch national Yang Bin, who operated A&A without a valid work pass and recruited foreigners to work for it without similar documents, was sentenced to six years’ jail and a fine of $16,000.

He will spend an additional 40 days behind bars if he fails to fork out the fine amount.

Yang, who has made no restitution, had pleaded guilty to six cheating charges and two charges relating to the employment of foreigners. Eleven other charges were considered during sentencing.

On Aug 26, Deputy Public Prosecutor Wong Shiau Yin told the court that between May 2021 and February 2022, A&A attracted investments from more than 700 parties in Singapore, amounting to around $6.7 million.

Court documents did not disclose if these 700 investors were linked to Yang’s cheating offences.

Yang was the second person involved in the scam to be dealt with in court. Chinese national Wang Xinghong, 40, pleaded guilty to six cheating charges and was sentenced to five years’ jail on Aug 6.

These cases involving two other Chinese nationals – Chen Wei, 43, and Lu Huangbin, 60 – are pending.

At the time of the offences, Yang was the chairman of A&A, which was incorporated on April 20, 2021.

The DPP said that Yang had engaged Lu, Chen and Wang to join the firm. She added that Yang was the overall person in charge of A&A, while the trio reported to him.

Between May 20 that year and Feb 15, 2022, the firm offered the “A&A chain mining scheme” to investors in Singapore.

Under this scheme, A&A promised investors a fixed daily return of 0.5 per cent on their investments, which would purportedly be derived from the mining of cryptocurrencies.

In its marketing materials to investors, which included promotional videos, A&A claimed it had entered into an agreement with a firm called Yunnan Shun Ai Yun Xun Investment Holdings to acquire 70 per cent ownership of 300,000 mining machines in China, which could mine cryptocurrencies such as Bitcoin and Ethereum.

A&A claimed it would generate the revenue for returns through the mining of cryptocurrency by using these machines.

In addition, the company developed an app that investors could use to purchase A&A “tokens” to invest in the mining scheme.

Crypto platform Coinbase describes mining as the process that several cryptocurrencies use to generate new coins and verify new transactions.

DPP Wong said: “In reality, A&A did not enter into an agreement with Yunnan Holdings to acquire 70 per cent ownership of 300,000 mining machines. In fact, A&A did not mine cryptocurrency to generate revenue.”

Yang had engaged Wang to develop the app, where investors could monitor their purported 0.5 per cent daily returns.

In earlier proceedings, the court heard that the app was a centralised software where system managers based in China could input random numbers to falsely reflect investor returns.

Court documents stated that Yang had directed Chen to collect cash from various investors. Yang then used the money for his personal expenses.

Yang had also come up with the false representation that A&A owned 300,000 physical mining machines in Yunnan.

“He tasked Lu, whom he had placed in charge of marketing, to spread this false representation to investors at A&A marketing events,” said the DPP.

Separately, she told the court that Yang entered Singapore on a social visit pass on or around April 8, 2021.

He later ran A&A without a valid work pass until around Feb 15, 2022. The company also employed Lu as its chief executive, even though he did not have a similar document.

Yang was arrested on Aug 16, 2023, and has been in remand since. The authorities managed to seize $100,000 from his home, which he admitted belonged to A&A’s investors.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

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