Shanghai Prosecutors Expose Virtual Currency Fraud Scheme Worth Over $4.8 Million

Shanghai’s Minhang District Procuratorate has reported a sharp increase in financial crimes in recent years, with scams involving virtual currencies and digital collectibles becoming more prominent.

Between 2020 and 2024, the procuratorate handled 237 arrest cases involving 375 people and 311 prosecution cases involving 704 people. While illegal fundraising, credit card fraud, and unlawful operations remain the most common offenses, prosecutors noted that an increasing number of schemes are disguised under the banner of “technological innovation.”

One highlighted case involved defendant Wu and his associates, who ran an e-commerce company and disguised their scam as a promotion for facial recognition payment devices. They promised rewards in “XD points,” but victims were required to buy large amounts of a fake token called GDFC, falsely marketed as a foreign cryptocurrency with huge upside. In reality, GDFC was a worthless fake token. When its price collapsed, the group introduced another token, ME, and artificially inflated its value to prolong the illusion.

The scheme defrauded investors of more than 35 million yuan (about $4.8 million), with funds diverted into personal accounts. Wu has since been charged with fraud.

Prosecutors warned that such scams not only endanger public property and mislead investors but also divert capital away from legitimate science and technology innovation. They urged the public to remain vigilant against promises of “high returns” or “fast profits” in the virtual currency space.