Guo Wengui Arrested - Charged with Fraud and $500 Million Crypto Scam

Guo Wengui Arrested – Charged with Fraud and $500 Million Crypto Scam

Updated: 17 March 2023

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It is like everyone in the crypto space, who once sought to exploit the decentralized nature of crypto, and the good nature of the crypto community is getting their dues. Guo Wengui, an exiled Chinese business known for his association with Steve Bannon and alleged for perpetrating a slew of schemes that defrauded retail investors out of $1.4 billion, was arrested in New York last night.

Guo Wengui Loses Penthouse Shortly After the Arrest – The Fiery Way

Shortly after his arrest, news came through that his high-class penthouse, located in the Upper East Side of Manhattan, had caught fire. The apartment burned for the whole two hours before firemen could calm the blaze.

The Federal Bureau of Investigation (FBI) suspects foul play and has started investigating the fire. Many believe that the arrest had to do something with that. Some speculate that it was to “get even,” and others suspect that the apartment may have been full of other paperwork or details that could have implicated the Chinese businessman even more.

Ferraris, Yacht, Mansion – All Were Funded Through Fraudulent Money

Gui Wengui is not new to the news. The Chinese businessman is known for his ultra-luxurious lifestyle. Much of his extravagant tendencies include a slew of Ferraris, a 50k square-foot pension, a $37 million Yacht, and more.

Investigators say that all these flamboyant purchases were made possible due to the money earned through scams.

But what is also interesting about this case is that the FBI agents were still inside the penthouse apartment when the fire broke out – giving them more reasons to suspect foul play.

Chinese Businessman Colluded with Steve Bannon To Run Many Schemes

Guo Wengui ran four schemes – out of which three were in collusion with Steve Bannon – a long-time ally of former U.S. President Donald J Trump. Those three schemes – all of which were related to . GTC media – a Chinese Social Media company that Steve Bannon and Guo created – raised an estimated $857 million.

The Chinese businessman was arrested on his Yacht in August 2020 and was charged with conspiracy to commit wire fraud and money laundering under the guise of funding the border wall between the US and Mexico. While the GTV media case has raised some eyebrows, Guo has not been charged with anything in connection to this company.

What he has been charged with is the fourth scheme, which, according to the US SEC (Security and Exchange Commission), raised $500 million from retail investors. The scheme was an unrelated crypto venture known as Himalaya Coin or the H-coin.

Formed in October 2021, H-Coin, according to Guo’s own words, was backed 20% by Gold that could recover “100% of losses attributed to H Coin.”

The case became big when four months after the introduction of the coin, Guo filed for bankruptcy protection, where he claimed to have assets worth $50k to $100k and liabilities of up to $500 million.

But these claims of poverty turned out to be false, as the Department of Justice (DOJ) announced on Wednesday that they seized fraudulent assets worth $630 million.

Out of the Pan and Into the Fire – Guo Wengui’s Woes with the Law aren’t New

Guo Wengui isn’t unfamiliar with legal troubles, for the first time he came into the news was in 2014, when he had to flee China as he anticipated fraud charges. A vocal critic of the Chinese Communist Party, Guo is wanted by the Chinese government. He filed for asylum in the US in 2017, the application is still pending.

And it seems certain that it is now not going to be accepted.

What Does This Mean for the Regulatory Aspects of Crypto?

After the FTX fiasco, whose scale is still being unraveled, people deserve some justice. Too many bad actors have penetrated the crypto space – and the lack of regulatory protection has emboldened them even further. While this recent charge doesn’t naturally mean that he would be convicted, an example has to be made.

That said, while it is good to see these bad actors getting what’s coming to them, a more progressive approach is required for a better cryptocurrency ecosystem. Recent IMF laws have taken a more stringent stance that might not be the best course of action in the long run.

That said, Bitcoin’s performance has been phenomenal as of late. The world’s first crypto punched through its $24k resistance and is currently trading at $25,704.

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