Bitcoin has been subject to a lot of fraudulent activity, owing partly to the decentralized and anonymous nature of cryptocurrency transactions. In addition to hacking attacks and bitcoin wallet theft, the digital currency has also been used as a means of money transfer in Ponzi investment schemes.
In Thailand, local news reports showed that the police have conducted a raid on a condominium building at Ratchadaphisek Road on allegations that an investment scheme was being conducted in the area. The suspect, who is Malaysian, has been blocked access to 13 rooms in the building.
Bitcoin Ponzi Scheme Operations
Apparently, the controversial UFun investment scheme has been running for quite some time already, under Kevin Lai, a manager of UDBP Management in Thailand. This was promoted openly as a commercial bank but not registered as one with the Bank of Thailand.
The rooms had allegedly been used to host members of the UFun management and diplomats from Vanuatu until the government got wind of fraudulent activities being conducted in the building. Since then, the Foreign Ministry refused to accept Vanuatu government’s request to recognise Lai as a special envoy, as he held diplomatic status for the Micronesian country of Nauru in 2005 but was discharged from the post in 2011.
The scam involves UToken, a so-called bitcoin rival that UFun claimed was backed by a gold reserve system. This is similar to the MyCoin scam, which had owners marketing themselves as a bitcoin exchange company. Back in February, its founders disappeared with approximately $400 million in bitcoin.
Thailand’s assistant police chief Suwira Songmetta mentioned that around 120,000 people have been victim to the UFun scam, with losses potentially reaching $1.13 billion. So far, only 110 people have filed official complaints. The raid followed a recent discovery by police that UFun Store Co Ltd, an affiliate of UFun, deposited $10 million under UDBP Management.