China’s ex-convict jailed six years in Singapore for S$6.7M crypto scam

SINGAPORE: Yang Bin (杨斌), a Jiangsu-born Dutch national and once China’s second-richest man, was sentenced to six years in prison and fined S$16,000 (US$12,284) on Monday (26 August) for orchestrating a multi-million-dollar Ponzi scheme disguised as a cryptocurrency investment opportunity.

The 61-year-old appeared before Singapore’s state court, where he admitted to operating a fraudulent company that falsely claimed to own 300,000 cryptocurrency mining machines in China.

These machines were purportedly capable of generating enough revenue to provide investors with daily returns of 0.5 percent.

In reality, Yang’s company had no such assets, and the scheme relied on funds from new investors to pay returns to earlier ones.

Yang, who was listed by Forbes as China’s second-richest person in 2001, pleaded guilty to eight charges, including conspiring to cheat, operating without a valid work pass, and employing an individual without a valid work pass.

An additional 11 charges were considered during his sentencing.

Yang’s fraud scheme: How he deceived over 700 investors in Singapore, raising S$6.7 million

After arriving in Singapore on a social visit pass, Yang incorporated A&A Blockchain Innovation on April 20, 2021, and appointed himself as chairman.

Despite lacking a legitimate work pass, Yang ran the company and hired several key figures, including Lu Huangbin (陆煌斌) as CEO, Chen Wei (陈伟) as his personal assistant and a director, and Wang Xinghong (王兴鸿) as chief technological officer.

All three reported directly to Yang, who maintained sole control over the company’s funds.

Yang directed Chen to collect cash from investors, which he then used for personal expenses.

Between May 2021 and February 2022, A&A Blockchain Innovation marketed its “Chain Mining Scheme” to Singaporean investors, promising them fixed daily returns of 0.5 percent from cryptocurrency mining.

The company claimed to have acquired a 70 percent stake in 300,000 mining machines located in Yunnan, China, through an agreement with Yunnan Shun Ai Yun Xun Investment Holdings.

However, this agreement never existed, and the mining machines were a fabrication.

Deputy Public Prosecutor Wong Shiau Yin explained that Yang sought to create a “veneer of legitimacy” by producing marketing materials, including presentation slides and videos, to deceive investors.

Lu was tasked with marketing the scheme to attract investors, while Wang developed an application that allowed investors to purportedly buy tokens and monitor their returns.

The app, however, was a centralized platform where system managers could input random figures to display fake returns.

The Ponzi scheme attracted over 700 investors, who collectively invested approximately S$6.7 million.

Yang’s charges involved S$1.8 million from 12 victims, with a net loss of around S$1.1 million after accounting for returns some investors had received. Yang did not make any restitution to the victims.

Yang was arrested in February 2022, and authorities seized S$100,000 from his residence, which he admitted belonged to investors in the scheme.

Of Yang’s co-accused, only Wang Xinghong has been sentenced, receiving a five-year prison term on 6 August for his role in the scheme. The cases against Lu and Chen are still pending.

Question arise how Yang incorporated and run his firm in Singapore despite high-profile case in China

Born in Nanjing in 1963, Yang Bin emigrated to the Netherlands in 1987, where he ran a textile business and became a naturalized Dutch citizen.

In 1995, he returned to China and established an orchid business in Shenyang, boasting “modern horticultural techniques” he had learned in the Netherlands.

Chinese media described Yang as known for his “barehanded white wolf” (空手套白狼) tactics, successfully persuading the local government in Shenyang to grant him various benefits, including tax relief, to develop a ‘Holland Village’ in the province.

At his peak, he amassed an estimated 6.5 billion RMB (approximately US$850 million). In 2001, Forbes listed Yang as the second-richest person in China.

However, by the end of that year, suspicions about his financial practices began to surface.

Reports questioned the rapid growth of his wealth and the legitimacy of Eurasia’s transactions. By 2002, his financial stability started to unravel as he faced mounting debt and financial difficulties.

In September 2002, North Korea appointed Yang to lead the economic development of the Sinŭiju Special Administrative Region (SAR), an ambitious plan by then-leader Kim Jong-il to create a Hong Kong-like special economic zone to spur growth.

At the time, Yang even claimed in front of the media that he was the “Kim Jong-il’s adopted son.”

However, shortly after his appointment, Chinese authorities placed him under house arrest on October 4.

He was formally arrested in November on charges of tax evasion, illegal land use, and financial misconduct. In July 2003, Yang was sentenced to 18 years in prison and fined 2.3 million RMB.

In September 2016, Yang was released on parole, four years earlier than scheduled.

After losing hope in the revival of North Korea’s Sinŭiju SAR project, Yang turned his attention to cryptocurrency.

In 2021, he promoted the ‘Marscoin’ blockchain project in China, boasting about his status as a “former top billionaire in China.”

In March 2021, he came to Singapore and established the “Chinese Business Philanthropy Foundation” and subsequently founded AA Blockchain in April.

However, questions have arisen regarding how Yang, a high-profile former convict in China for his previous case, was able to set up a company in Singapore with just a social pass, while promoting a Ponzi scheme.