The Chinese government has announced that Zhang Moumou, the mastermind behind a massive crypto pyramid scheme, has been extradited from Thailand to China following an extensive international manhunt.

According to local media, this marks the first time China has successfully extradited an economic crime suspect from Thailand since the two countries signed the China-Thailand Extradition Treaty in 1999.

The hunt for Fraudster Zhang

Zhang’s extradition on Aug. 20 represents a significant milestone in the global fight against economic crime, particularly in the rapidly evolving digital currency sector.

Zhang, who has been on the run since 2020, was the head of the notorious MBI Group. Since 2012, this criminal organization has been running a sophisticated online pyramid scheme, luring victims by issuing virtual digital currency and promising high returns on investment.

Participants were required to pay fees ranging from 700 to 245,000 yuan ($98 to $34,316) to join the platform, with earnings tied to the recruitment of new members and the amount of funds invested. The scheme eventually ensnared more than 10 million people, with the total funds involved exceeding 100 billion yuan ($14 billion).

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The scale and complexity of the MBI Group’s operations made Zhang one of the most wanted economic crime suspects in China. In November 2020, the Chongqing Municipal Public Security Bureau formally filed a case against Zhang. By March 2021, the Interpol China National Central Bureau had issued a red notice for his arrest.

Crypto Fraudster Zhang’s Arrest to extradition

Zhang’s capture by Thai police on July 21, 2022, was a significant breakthrough, but the extradition process was far from straightforward.

China’s request for Zhang’s extradition was made in accordance with the bilateral treaty between China and Thailand. The Thai Court of Appeal issued a final ruling in favor of extradition on May 21, 2024, and the Thai government subsequently confirmed this decision on Aug. 14, setting the stage for Zhang’s return to China just days later.

This successful operation is the result of coordinated efforts between China’s Ministry of Public Security, the Chinese Embassy in Thailand and Thai law enforcement agencies, all working under the banner of the Ministry’s “Fox Hunting Operation.”

Despite China’s crypto ban, the population is still vulnerable to crypto investment scams. In 2021, China implemented a comprehensive ban on Bitcoin, effectively halting all cryptocurrency transactions, as part of a multi-agency effort to clamp down on digital currencies.

Although cryptocurrency transactions are restricted, Chinese authorities recognize crypto as virtual property, granting investors legal protection and allowing them to hold digital assets.

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The New York Attorney General’s Office (NYAG) alleged that the defendants, including Cynthia Petion and her husband Eddy Petion, defrauded thousands of investors around the world, specifically at least 11,000 New Yorkers, by promoting these schemes.

The first alleged crypto mining investment scheme, AWS Mining, collapsed in April 2019 with the promise of 200% guaranteed returns. This was followed by a larger scam called NovaTech. He claimed that this platform is a crypto and currency trading platform. Investors deposited more than $1 billion in cryptocurrency into NovaTech from August 2019 to April 2023, but only $26 million was traded on the platform, according to the filing.

James described both schemes as pyramid schemes; In these schemes, promoters who invested in the platforms earned cryptocurrency by encouraging others to do the same. NovaTech has also been described as a Ponzi scheme in which investors are promised profits from cryptocurrency trading but are paid out of other investors’ cryptocurrency holdings.

The complaint alleged that the defendants carried out these schemes by running an affiliation scam targeting investors of Haitian descent. The schemes were introduced to investors in Creole and used their religious beliefs to trap these people, targeting those with the least financial means by promising financial freedom.

In June 2022, the defendants allegedly secretly sold their home in Florida and fled to Panama, transferring tens of millions of dollars worth of cryptocurrency from NovaTech. The scheme soon began to unravel.

Three British Citizens Charged with $2 Million Evolved Apes NFT Rugpull

The same day, the US Department of Justice announced that three British citizens were facing wire fraud and money laundering charges.

Damian Williams, U.S. Attorney for the Southern District of New York, and James Smith, Assistant Director of the New York Federal Bureau of Investigation (FBI) New York Field Office, announced the indictment against Mohamed-Amin Atcha, Mohamed Rilaz Waleedh, and Daood Hassan.

The charges relate to a scheme intended to defraud victims into purchasing NFTs from the Ethereum-based collectible Evolved Apes. Rugpull in 2021 has been described as a fraud scheme in which developers collect funds from buyers by promoting a digital project, then pocket the funds by abandoning the project.

“The defendants committed a fraud to raise the price of digital artworks with the promise of developing a video game,” U.S. Attorney Williams said in a statement. “They took investor funds, never developed the game, and pocketed the proceeds. Digital art may be new, but the old rules still apply: it’s illegal to solicit money with false promises. NFT fraud is not a game and those responsible will be held accountable.”

“Abandoning customers without delivering on promises not only reflects poor business ethics, but also violates the trust buyers place in sellers when purchasing an item from a store or stored on the blockchain,” said FBI Assistant Director Smith. “The FBI will continue to pursue those who commit fraud for the purpose of making a quick profit.”

These charges carry a maximum sentence of 20 years in prison.

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