A Chinese court has denied an appeal made by the masterminds of a $1.1 billion crypto Ponzi scheme sentenced to years in prison.
The intermediary court in the Yancheng city of China’s Jiangsu province ruled in a judgment on October 27 that four convicts who ran the WoToken Ponzi scheme will serve time behind bars between 2.5 and 8.8 years.
In addition, 425 million yuan, or $60 million, worth of illegal proceeds they gained from running the Ponzi scheme are seized by law enforcement and will be forfeited to the state treasury, the court ruled.
According to the ruling, Gao Yudong, Li Qibing, Wang Xiaoying and Tian Bo, operated the WoToken trading platform with its WOR token in a multi-layer pyramid model from August 2018 to October 2019.
The convicted operators told would-be users that the platform could yield both static and dynamic interests via its non-existent trading algorithm, which they claimed could take advantage of arbitrage opportunities on global crypto exchanges. In fact, those behind the scam delivered the promised interest returns by taking more funds from other users, according to court documents.
The court said that as of October 8, 2019, the WoToken operation had attracted 715,249 users in China with 501 layers.
The court further cited blockchain data, which shows the scheme had absorbed crypto assets, including 46,050 BTC, 286 million USDT, 2 million ETH, 292,590 LTC and 6,841797 EOS — which were worth a combined 7.7 billion yuan, or $1.1 billion, at the time of their accrual.