277 Chinese Nationals have been arrested following a raid led by the Philippine Bureau of Immigration in Pasig city on Sept. 11.
Crypto Scam Targets Philippines
The agents were acting on a tip received from the Chinese government last week, who suspected that a cryptocurrency scam being promoted to Chinese investors was operating from one of the Philippines’ special economic zones.
The raid was carried out against Grapefruit Services Inc., an authorized service provider for Golden Millennial Quickpay Inc. Ltd. – an offshore company providing cryptocurrency services that is licensed to operate in the Philippines by the Cagayan Economic Zone Authority (CEZA).
Immigration agents were assisted in their investigations and enforcement action by representing the Philippine Presidential Anti-Corruption Commission, the Philippine National Police’s Integrity Monitoring and Enforcement Group, and the Chinese Ministry of Public Security.
Grapefruit Allegedly Defrauded Over 1,000 Chinese Nationals
All of Grapefruit’s 277 employees are Chinese nationals holding CEZA visas – meaning that they are exclusively authorized to work within the Cagayan province special economic zone.
Despite being registered by CEZA, Grapefruit was found to be operating outside of the zone in which it is licensed to conduct business. The licensing also prohibits Grapefruit from operating as an investment company, or as a securities broker or dealer.
Philippine Authorities to Monitor Similar Businesses Licensed by CEZA
The arrests have prompted the Philippine Bureau of Immigration to monitor the operations of other companies that employ Chinese workers to support overseas entities providing cryptocurrency and other financial products.
Grapefruit is accused of promoting an investment scam that defrauded over one thousand Chinese nationals. While the raids initially sought to arrest just four individuals, Philippine authorities arrested 273 other suspects after they were caught “in the act of conducting illegal online operations.”
Last month, CEZA approved the zone’s first digital asset token offering, certifying the Flourish City Development Limited to raise capital through token offering.
Last modified (UTC): September 16, 2019 1:03 PM