Taiwan Dismantles $32.2 Million in Cryptocurrency Scam, Arrests 14 in Money Laundering

January 5, 2024

Taiwan’s Law Enforcement, the New Taipei City Criminal Police Brigade has unveiled and cracked down on the largest cryptocurrency scam ever detected in the country.  The authority conducted raids at over 15 locations in Taipei, New Taipei, and Taichung, and the base of the exchange and seized illegal funds worth approximately NT$1 billion ($32.2 million), as reported by the Liberty Times Net. A total of 14 employees including the founder David Pan and co-conspirator Lin Nan were arrested by the police.

Taiwan’s major cryptocurrency exchange, ACE exchange, was found actively engaged in marketing counterfeit digital currencies, exploiting its esteemed reputation to lure potential investors. Through deceptive social media promotions, the exchange misled more than 100 investors into investing in digital assets that ultimately proved to be worthless over the past three years.

Along with the crypto scam, individuals were also arrested on charges of money laundering. David Pan and Lin Nan, along with 12 other employees, are currently facing criminal charges including money laundering, fraud, and non-compliance with banking laws.

How the Cryptocurrency Scam was Executed?

Lin Nan exploited social media platforms like Instagram and Facebook to advertise fake cryptocurrencies such as MOCT (Magic Copoun Coin), NFTC, and BNAT. They made false commitments to the investors that these cryptocurrencies would be listed on well-known global exchanges, resulting in financial benefits.

Pan and Nan established the legitimacy of the scam by providing ACE exchange with a list of these counterfeit cryptocurrencies. With its credibility, the exchange deliberately promoted deceptive assets and deployed misleading social media adverts to entice investors.

Leveraging the information gap, the exchange claimed that its digital currencies represent the latest technology, like Bitcoin. The exchange assured investors of high returns, as professional teams managing the currency exchange but the investors ended up with worthless “junk coins” and “air coins”.

The police confiscated over NT$111.52 million ($3.5 million) in cash and more than NT$100 million ($3.2 million) in cryptocurrency. The illicit funds were seized during the raid in Lin’s house and the ACE exchange headquarters, and represent the gains accumulated over several years. A total of more than NT$200 million was seized during this crackdown. However, the authorities estimated that the two individuals executed fraudulent activities exceeding NT$ 1 billion in the past three years.

As the number of cryptocurrency scams is increasing day by day, many governments and law enforcement agencies are taking active measures to confiscate illegal funds and unveil the source behind such fraudulent activities.

Also read: Eurojust Seizes Assets in 20 Countries Following Coordinated Operation against Cryptocurrency Scam