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Crypto fraud gets personal in China as “send it to this wallet” becomes “give it to this guy“
In a scam that combined a fake relationship, fake crypto and real doorbells, a woman in Xuzhou, a city in eastern China’s Jiangsu Province, lost over $55,000 to a man who pitched USDT investments and sent a cash collector to her home. Five suspects have been arrested and the investigation is ongoing.
According to a notice published via the official WeChat account of the local police, the victim was first contacted by a man claiming to be an active-duty soldier. He gained her trust by invoking military rules that supposedly prohibited the use of WeChat, and directed her to download a separate app for private communication.
As their conversations grew more frequent and familiar, the man shared a fabricated story about a friend who had joined the state-run Tobacco bureau after retiring from the military and had access to internal data. He claimed they had already earned substantial profits through investments and invited her to get in on the action.
He then sent her a fake version of a “China Tobacco” investment platform and told her the site only accepted deposits in USDT stablecoin, commonly referred to as “U Coin” in China. When the victim expressed uncertainty about how to convert her money into crypto, the man offered to connect her with a local exchanger who could visit her home and complete the transaction.
Over the course of three in-person cash handovers, the victim gave away more than 400,000 yuan without receiving any cryptocurrency in return.
Authorities described this hybrid scam — blending online grooming with in-person cash pickups — as a growing trend in crypto-related fraud in mainland China.
In December, state mouthpiece People’s Daily reported that police in southwestern China’s Sichuan Province busted a money laundering operation that also began with a scammer posing as a former soldier who built emotional trust online and pitched a bogus investment opportunity.
But instead of having her funds picked up at the door, the victim in the Sichuan case was reportedly coerced into delivering it herself. After withdrawing 200,000 yuan (around $27,000) under the scammer’s direction, she handed the cash to five masked men at a roadside location. The fraud led investigators to a laundering scheme involving 12 suspects and nearly 10 million yuan ($1.36 million) in stolen funds.
Bitcoin miner on the outside, illegal arcade on the inside
South Korean police have reportedly uncovered an unregistered arcade that was disguised as a cryptocurrency mining facility.
The case flips a familiar script. In most crypto-related busts, mining operations disguise themselves as other businesses to hide electricity use or skirt regulation. But here, it was a crypto-mining facade used as camouflage.
The local police said that they had booked a man on suspicion of violating the Game Industry Promotion Act. He is accused of operating a covert, illegal gaming business inside an office space dressed up to look like a crypto mining center. In South Korea, arcades that convert game points into cash — particularly those operating without a license or under a false business front — are illegal.
According to investigators, the entrepreneur had rebranded arcade machines to resemble cryptocurrency mining rigs and registered visitors as “members.” New players were asked to set up personal crypto wallets — though it’s believed no actual cryptocurrency was involved. Instead, the use of wallets and crypto terminology appears to have been part of an effort to legitimize the operation and blur its true purpose.
The games themselves were modified versions of free mobile titles, repackaged into paid arcade-style machines. When players earned points, they were told to use a so-called “coin app” which functioned as a payout interface designed to mimic a crypto transaction platform. In reality, players simply entered their bank account numbers, and the system transferred cash directly into their accounts, deducting a 10% fee. No blockchain activity has been confirmed.
Investors are using USDT to hedge against local currency depreciation
With the Korean won down more than 10% against the US dollar in the past six months, local investors are increasingly turning to stablecoins like USDT as a hedge.
A new survey of 300 South Korean stablecoin investors by Hashed Open Research found that over a third (37.7%) said their primary reason for buying stablecoins was simply to hold US dollars. The report, published by Hashed Open Research, points to growing retail adoption of dollar-denominated assets as the local currency continues to weaken.
Before crypto, access to dollars in South Korea was largely limited to banks and foreign exchange services, but the emergence of stablecoins has enabled users to gain exposure to the US dollar via domestic or international crypto platforms.
While 60.7% of respondents said they primarily use stablecoins for trading, dollar exposure was identified as the second most common reason. That function appears to be gaining appeal across all age brackets, not just among speculative traders.
Other notable motivations included earning deposit interest (24.3%) and engaging in kimchi premium arbitrage (30.3%), where traders exploit pricing gaps between South Korean and global crypto markets. Deposit yields offered by platforms like Binance and Coinbase currently hover around 4%, compared to 1% to 2.5% for Korean won savings accounts.
The most commonly held stablecoin was USDT (94%), followed by USDC (40%), with smaller but notable holdings in DAI (22%), Ethena’s USDe (21%), and PayPal USD (18%). The strong exposure to newer products like USDe and PYUSD — despite their much smaller market caps — suggests Korean investors are willing to experiment across the stablecoin spectrum.
Hong Kong greenlights staking under parental guidance
Hong Kong’s Securities and Futures Commission has officially approved the provision of staking services by licensed crypto exchanges and funds.
Virtual asset trading platforms must obtain the SFC’s written approval to offer staking services.
Staking was previously off-limits to local exchanges. The latest policy shift allows staking, but only under strict conditions, including a requirement for platforms to retain direct control of client assets and to disclose risks such as validator slashing, blockchain bugs, and lock-up periods.
Staking by crypto funds will also be permitted, but only through SFC-licensed trading platforms or authorized institutions, with limits on how much can be staked at any time to manage liquidity risk.
Hong Kong is warming up to staking as part of its broader ambition to become a global hub for digital assets. But rather than opening the floodgates, the city has taken a measured approach to position itself as a safe zone for regulated entities instead of a free-for-all.
“Broadening the suite of regulated services and products is crucial to sustain the healthy advancement of Hong Kong’s virtual asset ecosystem,” said Julia Leung, the SFC’s CEO. “But the broadening must be done in a regulated environment where the safety of client virtual assets continues to be front and center of the compliance framework for offering such service.”
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