A Filecoin mining fraud has been discovered in China, with cryptocurrencies worth $62 million confiscated. In operation, which covered many cities, including Shanghai and Shenzhen, officials detained 31 accused fraudsters and confiscated Ether, Filecoin, and the local token Teda, as per local sources.

The Fengxian County Bureau of Chinese officials reported that 31 members of the IPFSUnion Star Alliance had been apprehended. The Shanghai-based alliance, which includes Alibaba, Microsoft, and Huawei among its key members, is a prominent blockchain participant in China. In April, it stated that it would invest $1.3 billion in the world’s biggest Filecoin mining plant.

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Authorities stated they had seized 400 million yuan ($62 million) in ETH, FIL, and Teda coins from the fraudsters in a news statement. In several large cities, including Shanghai, Shenzhen, Wuhan, and Xuzhou, they had clamped down on the swindle. The fraudsters were allegedly engaged in a multi-level marketing scheme, although the specifics are still sketchy.

Employees of IPFSUnion were not participating in the fraud, according to the company. Instead, IPFSUnion staff were involved in the fraud because the accused utilized alleged illegal funds to buy, and therefore [the employees] helped in the investigation, as per Chinese digital currency journalist Wu Blockchain. Most members have returned to regular employment and will return to duty after the assistance investigation is concluded.

The investigators have yet to determine if IPFSUnion is a direct participant in the scheme.

This is the latest in a long series of Filecoin-related phishing schemes in China. The project has grown in popularity in China since its $200 million token sales, and fraudsters have taken advantage of this. In 2019, a fraudster is accused of defrauding Chinese investors out of $300 million by selling bogus miners to thousands of people.


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