A group of people in China have been arrested following allegations that they masterminded a cryptocurrency fraud worth almost USD $100m.
According to a report on the Chinese news website Shaanxi Daily, people have been taken into custody across the country as part of a wide-ranging police probe.
The arrests are the most recent chapter in a long-running law enforcement battle which has seen the Chinese authorities mount a complex technological investigation.
Back in March, law enforcement officials in the Chinese city of Xian, which is located in the province of Shaanxi in the north of the country, were approached by an alleged victim who said they had been defrauded out of a large amount of cryptocurrency.
It is believed this amount was worth around ¥100m, which is now equivalent to around USD $14m or £11m.
The alleged victim, who was named only as Zhang by officials, said that access to his personal computer had been compromised in order for the theft to take place.
A variety of different digital coins were believed to be among the stolen assets. Bitcoin formed the bulk of the portfolio of stolen cryptocurrency, but alternative crypto assets including Ethereum were also taken.
As is common in these cases, the report from one alleged victim led to a snowball effect as it meant the Chinese police were then able to track down related cases.
It led to police discovering a further suspected participant in Hunan province, which in turn uncovered two other people believed to be involved.
At this stage in the investigation, Chinese police are understood to have co-operated with some of the country’s leading internet providers in order to gather further evidence to bolster their case.
Despite the arrests, the investigation is currently still underway and police remain on the lookout for more evidence.
It is certainly not the first time China has had to deal with this type of fraud head-on, and the country is widely known for having problems with illegitimate cryptocurrency dealings.
The country has taken an international lead when it comes to very hard line cryptocurrency regulation choices. Trading cryptocurrency assets is illegal in China, although the existence of fraudulent schemes such as this one shows that it continues to occur.
While the exact method of the Xian and Hunan hackings which led to the most recent arrests is not clear, China has a particular problem with the use of malware in cryptocurrency fraud cases.
Malware is software designed with the explicit purpose of hacking a computer. In July of this year, police working in partnership with other Chinese law enforcement agencies uncovered a huge cryptocurrency scam powered by malware.
Figures show that around USD $2m was taken from Chinese investors via this scam in particular, although it is believed that the actual figure of all Chinese crypto malware scams is much higher.