Cryptocurrency

Rajnandgaon Police froze cryptocurrency worth crores in the cross-border cryptocurrency fraud “Sha Zhu Pan” (殺豬盤) case.

Dispatch News.

In three months, Rajnandgaon Police solved the famous cryptocurrency fraud “Sha Zhu Pan” (meaning Romantic scam in Chinese) case. Victim Dr Abhishek Pal, a resident of Rajnandgaon, complained about this new type of crime to Superintendent of Police Santosh Singh. After registering, the Superintendent of Police Rajnandgaon Gaurav Rai IPS investigated the issue.

The suspect Ana-Lee befriended Dr Abhishek Pal on a social network site and then lured him to invest in the Forex trading platform MetaTrader-5 through a shell company registered in London. She also got him to transfer cryptocurrencies from Binance through a fake website insafx.com. The victim had invested 35,000 USD in Metatrader-5, and his portfolio increased to USD 107825. Later, when the victim tried to withdraw his money, the suspect froze his account and duped him for USD 107825.

During the investigation, the police discovered that Ana-Lee had created a fake account using photos of Stephanie Teh, an Instagram star from Taipei, Taiwan, to deceive the victim. Then a cryptocurrency trail was mapped to analyze the flow of cryptocurrencies and after analyzing hundreds of wallet addresses and thousands of transactions, three wallet addresses were found to be linked back to Binance. User accounts are registered under the names of Liu Qiang, Wing San Tse and Guo Pan, all of whom are Chinese. At the Research Officer’s request, all the three user accounts in which Rs. 4 crores have been frozen, and the police are in the process of confiscation. There may be many Indians who may fall prey to the Shu Zhu Pan scam. Other cryptocurrency exchanges such as Honi Global and OKX.com did not cooperate with law enforcement requests in sharing information, indicating the need for more regulation.

The ‘Sha Zhu Pan’ scam is a type of scam that usually originates in Southeast Asia, most often from China. The main feature of the said fraud is that the suspect gradually builds a friendship with the victim to deceive the victim. According to CipherBlade, these are large corporates that run in a corporate-like structure, often with their own offices in which many employees and executives work in an organized manner. No individual runs it alone. To cite the scale of this organized crime, the investigation found that more than 2000 shell companies were registered in London with the same address where the broker and the directors of all companies were residents of China. According to CipherBlade, about 40% of the investigations into cryptocurrency fraud are related to the ‘Shu Zhu Pan’ scam. According to the Global Anti Scam Organization, Shu Zhu Pan scammers defraud victims of billions of dollars every year, and this type of organized crime syndicate is also involved in human trafficking and money laundering. In 2021, the FBI reported losses of USD 1 billion from such scams in the US alone. 

Cryptocurrencies themselves are highly volatile and risky assets. One can avoid falling into the trap of such scams by doing proper research before investing.

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