Tech lead jailed after Singapore investors lose S$1.1m to crypto firm started by Chinese tycoon

SINGAPORE: The chief technological officer of a company that drew S$6.7 million from investors in Singapore under a bogus cryptocurrency investment scheme was jailed for five years on Tuesday (Aug 6).

Wang Xinghong, a 40-year-old Chinese national, pleaded guilty to six charges of conspiring to cheat, with another seven charges considered in sentencing.

Investors in Singapore lost S$1.1 million (US$829,700) in what turned out to be a Ponzi scheme allegedly started by co-accused Yang Bin - listed by Forbes in 2001 as China's second-richest man.

The court heard that Yang incorporated A&A Blockchain Innovation in April 2021.

The company offered its Chain Mining Scheme to local investors, promising them a fixed daily return of 0.5 per cent on their investment, which would supposedly come from mining cryptocurrencies.

In marketing materials to investors, A&A claimed it had agreed with Yunnan Shun Ai Yun Xun Investment Holdings to acquire 70 per cent ownership of 300,000 mining machines in Yunnan, China.

These machines could purportedly mine cryptocurrency such as Bitcoin and Ethereum.

The company also developed an application that investors could use to buy tokens to invest in the mining scheme and monitor their daily returns.

In reality, A&A had entered into no such agreement with Yunnan Holdings, nor did it mine cryptocurrency to generate revenue.

Instead, it operated a money circulation or Ponzi scheme, using money from new investors to pay returns owed to earlier investors.

Wang was hired by Yang to develop the mining app. He knew there was no real mining, nor real returns being paid out.

He developed the app as a centralised software where system managers based in China could input random numbers to falsely reflect investor returns.