Guo Wengui Accused of $1 Billion Crypto Fraud

On Wednesday, the US DOJ (Department of Justice) and the Securities and Exchange Commission (SEC) reported that Guo Wengui, a Chinese billionaire living in exile, was detained in New York for supposedly planning a fraud scheme worth more than $1 billion which involved cryptocurrency.

Guo, also known as Miles Guo and Ho Wan Kwok, or "Brother Seven," has been accused of committing 12 counts of wire fraud, securities fraud, bank fraud, and money laundering. The DOJ stated that he allegedly used false statements and representations to persuade hundreds of thousands of his online followers to invest in various entities, resulting in more than $262 million in victim funds being obtained through the Himalaya Exchange, a supposed cryptocurrency ecosystem.

The DOJ disclosed that it had seized around $634 million from 21 bank accounts linked to the alleged fraud.

The DOJ also stated that Guo Wengui is accused of making false statements and offering his investors inflated returns in exchange for supporting various ventures, including GTV Media Group Inc. In addition, Guo has been charged by the SEC for participating in unregistered and deceitful offerings that garnered more than $850 million.

Bail Denied for Guo Wengui

According to the SEC, an investment scheme that employed cryptocurrency security called "H-Coin" or "Himalaya Coin" deceptively collected hundreds of millions of dollars from investors.

The project falsely stated that 20% of the coin's value was supported by gold and that the issuer would compensate investors in the event of any losses. According to Gurbir S. Grewal, the director of the SEC's enforcement division, the issuer, Guo, capitalized on the hype and appeal of cryptocurrency and other investments to victimize thousands and fund his and his family's luxurious lifestyle.

On Wednesday, the SEC made this statement, and CNN reported that Guo was denied bail at a hearing held the same day.

US Attorney Damian Williams claimed that Guo had committed the crime of profiting from embezzled money. Williams specifically mentioned that Guo had used the stolen funds to buy a 50,000 square-foot mansion in New Jersey for himself and his close relatives, as well as a Ferrari valued at $3.5 million, two mattresses worth $36,000 each, and a lavish yacht that cost a whopping $37 million.