China Busts $6M Crypto Scam Targeting 66,000 Indians

Chinese authorities have dismantled a major cross-border crypto scam that defrauded more than 66,800 Indian citizens, stealing an estimated $6 million (₹51.7 crore), per Global Times. 

The syndicate operated a well-planned telecommunications fraud using fake investment apps, fabricated online identities, and social engineering tactics. The operation was centered in Heze, a city in China’s Shandong Province, and ran from May 2023 to January 2024.

The People’s Court of Heze Economic Development Zone sentenced nine individuals to prison terms ranging from five years to nearly 15 years, also levying substantial fines. The court emphasized the cross-border nature of the crime and issued a clear warning: such digital and telecom frauds will be met with serious punishment.

How the Scam Worked

The scam began when He Moutian, identified as the mastermind, rented an office in Heze. He hired a team to carry out a layered fraud operation involving social media, psychological manipulation, and cryptocurrency transfers.

Scammers posed as affluent Indian women, targeting Indian men on chat apps. Using fake images and fake GPS locations in India, they created false emotional bonds with victims. Once the target felt connected, they were introduced to a bogus investment platform named “SENEE”.

The hook? Promises of 8-15% monthly returns on small investments, as little as ₹1,000. The platform appeared legit. Fake NBFC licenses, Indian business documents, and even customer service staff were put in place to maintain the illusion.

But once investors began depositing more money, the site would either go offline or declare that the funds had been converted into equity, making withdrawals impossible.

Crypto at the Core of the Laundering Operation

The group converted victim deposits into stablecoin Tether (USDT) using third-party payment platforms. The funds were then quickly laundered into Chinese yuan or U.S. dollars, while keeping a 15% profit margin. While the report doesn’t specify which platforms were used to convert USDT into fiat, the court confirmed that the group regularly operated through anonymous crypto exchanges and over-the-counter networks.

Each scammer in the operation had a defined role — from impersonating investors and creating fake documents, to handling crypto transactions and training new members. It was a full-fledged corporate-style scam.

Fake Lives, Real Losses

What made the fraud particularly dangerous was its emotional depth and sophistication. Scammers didn’t just promise profits. They created stories. They posed as married but lonely Indian women who became rich through smart investments. They posted luxury photos and claimed to be in cities like Mumbai, Delhi, and Bangalore.

One of the key operatives, surnamed Li, admitted to doctoring images and personal details to seem authentic. Her profile featured expensive watches, yoga routines, and emotional captions to bait trust.

Court documents revealed that victims, once emotionally involved, were less skeptical of the investment pitches. That emotional leverage played a key role in the scam’s success.

Telecom Fraud Is a Growing Crisis in China

The crypto scam is part of a broader epidemic of telecom fraud that China is now aggressively trying to eliminate. In 2024 alone, Chinese courts have tried over 40,000 fraud-related cases, while more than 78,000 individuals have been prosecuted. Compared to 2023, that’s a 26.7% rise in trials and a 53.9% increase in prosecutions.

In March 2025, Chinese authorities repatriated more than 2,800 nationals from Myanmar who were running scam call centers on the Myanmar-Thailand border. These syndicates used similar emotional and investment scams, many targeting Indians.

Earlier this year, four major operatives involved in these Myanmar-based scams were sentenced to life imprisonment. China is clearly treating telecom and online fraud as a national threat with global consequences.

India's Response

India hasn’t turned a blind eye to these attacks. In January, the Department of Telecommunications (DoT) launched the Sanchar Saathi platform. This initiative uses AI and public data to detect suspicious numbers, disconnect fraudulent SIM cards, and block devices used in scams.

Results have been encouraging:

• Over 3.4 crore mobile numbers disconnected
• 3.19 lakh handsets blacklisted by IMEI
• 20,096 bulk SMS senders banned
• Nearly 17 lakh WhatsApp accounts deactivated

The DoT has also forced app stores and platforms to remove tools used for caller ID spoofing and SIM tampering, common tactics in scams like the one uncovered in China.

Under the Telecommunication Act, 2023, fraudulently acquiring SIM cards or altering telecom identifiers can now lead to three years in prison or fines up to ₹50 lakh.

A Warning and a Wake-Up Call

Judge Liu Xilei, who presided over the case, warned that similar telecom and crypto frauds will face strict action, especially when they cross international borders. He urged others involved in ongoing operations to come forward voluntarily.

The case stands as a grim reminder of how fast trust can be weaponized, especially when emotional manipulation is backed by technological sophistication. 

This isn’t just about crypto. It’s about the future of trust in digital finance, the growing threat of cross-border scams, and the urgent need for stricter KYC and AML standards in crypto platforms.