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Chinese authorities charge six people over $5.8B PlusToken ponzi scheme

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Six of the 109 individuals recent arrested by Chinese authorities in connection with the $5.8 billion crypto Ponzi PlusToken have been charged.

The defendants Chen Shaofeng, Luu Jianghua, Lu Jianghua, Lu Qinghai, Jin Xinghai, Wang Yin, and Zhang Qin were charged by prosecutors in Xiangshui County and Yancheng City on September 7. The authorities said they were “suspected in organizing and leading criminal pyramid schemes.”

Official announcement of PlusToken scammers’ prosecution: 12309.gov.cn

109 individuals suspected of involvement with PlusToken were arrested in late July, including 27 persons believed to be the scam’s executives along with 82 “key” promoters. 

The accused ringleader of the scheme was also arrested in May, while a further six suspects were extradited to China from Vanuatu in July 2019.

PlusToken published its whitepaper in February 2018, claiming to be a South Korean crypto exchange offering interest-bearing accounts generating returns of between 10% and 30% per month in the form of its native token ‘PLUS’.

The scam took in more than 200,000 Bitcoins (BTC), 789,000 Ether (ETH), and 26 million Eos (EOS) from approximately $3 million unsuspecting investors by May 30, 2019.

After PlusToken users found they could no longer access their funds during June, Chinese police became involved. No major movements of PlusToken funds appear to have taken place since the last arrests, with the last known transfers from PlusToken wallets taking place in late June.



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New York authorizes first Yen stablecoin operator in the US

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New York has given the first authorization to a stablecoin backed by the Japanese Yen to operate in the U.S.

Per a Dec. 29 announcement, the New York Department of Financial Services has granted Japanese firm GMO-Z.com a charter to handle U.S.D. and Yen-backed stablecoins in New York. 

Given New York’s status as a global center, the NYDFS is the most prominent state financial regulator in the U.S. It is also one of the most aggressive. A pass to operate in New York often opens up the rest of the country. 

GMO’s charter is as a limited liability trust company rather than a full bank, the principle difference being in authorization to handle deposits. While a stablecoin operator typically needs the ability to hold reserves of the pegged asset, GMO’s charter limits its rights to hold other kinds of deposits not central to its ability “to issue, administer, and redeem” its stablecoins. 

The right to issue such non-depository charters has been a bone of contention between state regulators like the NYDFS and national banking regulators in the U.S. 

GMO president and CEO Ken Nakamura said: “We’re breaking ground with our move to issue the first regulated JPY-pegged stablecoin, which many see as a safe haven asset.” 

The NYDFS recently made changes to its famous BitLicense, including a conditional format that buddies up newly licensed firms with existing licensees. The first conditional BitLicense went to PayPal, facilitating the launch of its new crypto services earlier this fall with the help of longstanding licensee Paxos.