Chinese exile billionaire charged with crypto fraud

Category: Americas Crypto Fintech
Posted by Lea Hogg

The US Department of Justice has arrested Ho Wan Kwok, aka Guo Wengui, aka Miles Guo for crypto fraud, allegedly soliciting investments through ‘false statements and misrepresentations’ via social media networks where he has thousands of followers.

Crypto influencer Kwok aka Guo was born in China and became a billionaire through real estate. He filed for asylum from China and emigrated in 2014 and in 2017 became a resident of New York. He is a vociferous critic of the Chinese regime and shared controversial comments about Beijing and China’s governance and strategy. China in return described Guo as ‘corrupt and not to be trusted’.

He befriended former senior White House Counsel Steve Bannon, a member of Donald Trump’s inner circle. Guo became a staunch supporter of Trump and was often a gust at Trump’s summer home in Mar-a-Lago. One of the projects that materialised from this partnership was GTC media, a Chinese social media company which raised nearly US $900 million from investors.

In fact when Bannon was arrested in 2020 for fraudulent activity, he was on Guo’s yacht.

Exploiting decentralised crypto space

Guo carried on expanding his business alone post the Bannon arrest and set up the Himalaya Exchange which was marketed as a stablecoin and traded the Himalaya Coin and Himalaya Dollar. The cryptocoins were referred to as H-Coins. Investors were guaranteed that any negative variance in their investment would be covered by the exchange. Despite the fact the guarantees of the exchange were impossible to deliver, investment of US $262 million was raised mainly through hype on social media accounts.

The transactions that followed by the exchange were complex and difficult to trace with the purpose of enriching the founder and his business partners.

The Department of Justice this week charge Guo and his associates with a number of felonies that include wire fraud, securities fraud, bank fraud and money laundering. Accounts in the Exchange were frozen and US $634 million were seized by the Feds. Guo may have defrauded investors out of US $1.4 billion but the figure is not yet confirmed. Most of the paperwork with records of transactions has been destroyed during a fire in Guo’s penthouse located in the Upper East Side of Manhattan. It took firefighters more than two hours to extinguish the fire. The FBI are investigating the cause of the fire.

We allege that Guo was a serial fraudster, who raised more than $850 million by promising investors outsized returns on purported crypto, technology and luxury good investment opportunities. In reality, Guo took advantage of the hype and allure surrounding crypto and other investments to victimize thousands and fund his and his family’s lavish lifestyle” Gurbir S. Grewal, Director of the US Securities and Exchange Commission

 

Bankruptcy

Last month Guo filed for bankruptcy, claiming assets of under US $100,000 and liabilities of up to U $500 million.  He could not keep up with his extravagant lifestyle and love of luxury goods. His assets include a number of Ferraris and a superyacht valued at more than US $40 million.  It is suspected that the claims of bankruptcy are allegedly false.

Crypto markets

Bitcoin’s performance is on the rise. It is currently trading at around US $26,000, up by 5.6 percent.

 

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