How is your money gradually drained by "air coins"? (Real case of 35 million)

Case Review: A “Risk-Free” Technical Dream

This incident occurred between 2020 and 2021. The main culprit Wu and his gang orchestrated a spectacular show combining “high technology” and “financial investment.”

Step 1: Draw a Big Pie — “Face Recognition Payment” Franchise, Making Money While Lying Down

Wu first started a company and promoted “face recognition payment” as the future trend, claiming the market was enormous. Under this banner, they recruited franchisees, promising high subsidies and dividends, fooling many into paying large franchise fees. Sounds very tempting, right?

Step 2: Give You a Little Sweetener — A Heap of “XD Points”

After paying the franchise fee, the promised returns were nowhere to be seen. Instead, the franchisees’ accounts were filled with a bunch of things called “XD points.” The gang explained that these points were valuable, could be used as money later, and could even be exchanged for more valuable digital assets.

Step 3: Show Fangs — The “GDFC Virtual Currency” That Lures You In

Seeing that the points had no place to be used, everyone started to feel suspicious. At this point, Wu’s gang “thoughtfully” launched their core product — “GDFC virtual currency.” They boasted that this coin was issued by a large foreign company, had strong technology, great potential, and an immeasurable future value. To cash out the “XD points” in hand? The only way was to use them to buy “GDFC coins.”

But what is the truth? This “GDFC coin” is purely a “air coin” casually generated by Wu and his team on their backend server. The issuance amount and price fluctuations are entirely at their whim, with no real connection to blockchain technology.

Step 4: Squeeze the Last Drop — “GM Fusion” for a Second Harvest

Wu’s gang manipulated the backend to cause the “GDFC coin” price to skyrocket, attracting more investors. When the “vegetables” (investors) grew enough, they suddenly dumped the coins, causing the price to plummet to zero, trapping all investors.

Many lost everything and started causing trouble. To stabilize the situation and perhaps make another profit, Wu came up with a new trick called “GM Fusion.” They issued a new coin “ME,” fooling everyone into thinking that they could use the invalid “GDFC coins” to “fuse” into the new coin. Then, they repeated their old tactics, artificially raising the “ME” coin’s price on the backend to create a false impression of a turnaround, tricking people into investing more money.

In this way, after multiple rounds, the total involved amount exceeded 35 million yuan. Now, these people have been arrested.

Scam Breakdown: Why Do People Keep Falling for It?

This case is a classic textbook of “air coin” scams. The scammers’ tricks are actually just a few, but they always manage to catch people off guard:

Wearing “High-Tech” Cloaks: The scammers are quite savvy, always choosing some impressive but obscure concepts like “face recognition payment,” “metaverse,” “AI quantification,” etc. When you hear these, you think they are cutting-edge, and unconsciously lower your guard.

Playing the Old Ponzi Scheme: First, they collect a large sum through franchise fees and membership fees, then use new investors’ money to pay old investors “profits,” creating a false illusion of quick earnings, attracting more people.

The Core is Their Own Controlled “Air Coins”: The key to the entire scam is the “air coin” they control and can manipulate at will. They set up their own trading platform, drawing price charts as they wish, making everything look prosperous, but in reality, you’re just buying a string of worthless code.

Preying on Your “Unwilling to Give Up” Psychology: After the coin price crashes, scammers won’t run away immediately. They understand gamblers’ psychology well, knowing you are unwilling to lose money and always want to recover your losses. So they introduce new schemes and concepts, making you think there’s still a chance to turn things around, and willingly become their second or third harvest.

Practical Advice: How Should Ordinary People Protect Themselves?

This case reminds us that virtual currency is a deep water. The government has long explicitly banned virtual currency trading, but scammers always find new tricks.

What do regulators say?

In 2021, the People’s Bank of China and ten other departments jointly issued a document, clearly stating that all transactions related to virtual currencies are illegal in China. With such strict policies, scammers can only operate covertly, making their tricks more hidden.

A Reminder for Ordinary People:

Don’t Believe the Myth of “Getting Rich Overnight”: Anyone claiming a certain coin is “risk-free” or offers “hundredfold returns” is almost certainly a scam. You won’t get something for nothing.

Stay Away from “Three No’s” Projects: A legitimate blockchain project should have a technical white paper, open-source code, and practical application scenarios. Projects that only boast and tell stories but can’t produce anything real should be avoided at all costs.

Don’t Be Fooled by “Insider News” and “Teacher-led Trading”: Often, the investment groups you join are full of shills. Those so-called “teachers” are just after your money.

Ultimately, it all comes down to common sense: No matter how dazzling the concepts sound, the basic logic of investing and making money doesn’t change. If you don’t understand something, don’t invest easily. Protecting your own money is more important than anything else.

What I want to say to everyone finally is:

The arrest of scammers in this Shanghai case is a good thing, but more importantly, it teaches us all a lesson. In the digital age, opportunities are plentiful, but so are traps. Only by sharpening our eyes, avoiding greed and blind obedience, can we prevent scammers from having any foothold.