Police in Guangdong, a city in China have allegedly arrested hundreds of individuals for their involvement in an illegal gambling ring that has seen the gambling of $1.5 Billion in cryptocurrencies over the world cup period.This stems from an investigation across 21 security firms within Guangdong that in total has seen arrests of 540 people, all of whom have had involvement in the organization of illegal gambling rings. According to CCN:
“In an announcement, the Guangdong Provincial Public Security Department narrowed down on a specific unnamed online gambling platform that facilitated over RMB 10 billion ($1.5 billion) in cryptocurrency betting. The gambling platform promised support for betting in Bitcoin, Ethereum’s Ether token and Litecoin, the announcement said. In the 8 months since its launch, the gambling platform attracted over 330,000 members.”
It is alleged that this platform was set up as a pyramid scheme which promised to reward gamblers for introducing more people to the programme. This in turn has clearly had a snowball effect given that 540 people seem to have had an active involvement in the recruitment of 330,000 members in just 8 months.Though this is entirely illegal, it’s quite incredible just how many people have been involved in this. It’s fraud on the most colossal scale. Furthermore, according to CCN:
“Authorities have also arrested ‘six key members’ behind the gambling platform across China, frozen assets of over RMB 5 million and confiscated cryptocurrency worth over RMB 10 million (approx. $1.5 million). Servers, computers, smartphones and bank cards were also seized during the crackdown which has seen authorities shut down seventy mobile apps and websites alongside 250 online chat groups overall. ‘This is the most representative [example] of a new form of online football gambling’ the Guangdong authority added.”
See the full report for yourself, here. It is a shame that a sporting stage this large has encouraged such malicious behaviour. Whilst the intent to gamble may have been totally honest, the idea behind unlicensed gambling rings is far from it. By setting up a ring on this scale, the organizers have access to huge profits all at the expense of vulnerable individuals that have clearly been tricked into gambling their cryptocurrencies on football matches. Whilst gambling can host intrinsic rewards, scams of this level are dangerous and really do damage the reputation of cryptocurrencies.
Robert first came across Bitcoin in 2016 during a meetup in Belgium, and has been hooked ever since. With a background in Economics, you can find Robert frequently looking at the Twitter feed of the SEC for any regulatory updates relating to Bitcoin and Crypto in general.
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