One of the organizers of a $ 1 billion cryptocurrency fraud scheme arrested in the US

US law enforcement authorities have arrested one of the organizers of the fictitious online club G|CLUBS and the Himalayan Cryptocurrency Exchange on charges of fraud amounting to about $ 1 billion.

A representative of the U.S. Attorney’s Office in the Southern District of New York said that Chinese-born businessmen Miles Guo and Kin Ming Jae fraudulently induced thousands of citizens of several countries to finance the fake G|CLUBS club. Guo and Jae used the $ 262 million they received to buy a mansion in New Jersey and other luxury items.

In addition, Guo and Jae are accused of involvement in the creation of the Himalaya Exchange, a pseudo-cryptocurrency ecosystem that allegedly has its own stablecoin, H-Coin, and the Himalaya token.

The U.S. Securities and Exchange Commission (SEC) joined the law enforcement lawsuit and filed its own charges against the fraudsters for raising more than $ 850 million in «unregistered and fraudulent offerings» through the Himalaya token and H-Coin stablecoin.

«The fraudsters misrepresented to potential investors in H-Coin that 20% of the value of H-Coin was backed by gold and that they would personally compensate investors for any potential losses ,» the SEC said.

Miles Guo was arrested on March 15, and Kin Ming Jae is currently on the run from law enforcement. Guo and Jae are charged with 11 counts, which provide for decades of imprisonment if convicted.

At the end of last year, law enforcement agencies in Italy and Albania, in cooperation with the EU, uncovered a fraudulent scheme involving investments in cryptocurrencies. The criminals managed to steal about € 15 million. The unfortunate investors were promised large profits with zero risks. Later, the fraudsters encouraged their clients to increase their investments. Using software for remote computer access, the fraudsters changed account data because they had all the necessary information.