The report stated that Yi Zhou and Xiang Li managed to manipulate traders into sending them their bitcoin funds under the promise of giving them interest on their deposits. Through this scheme, the traders have succeeded in gathering over 7,000 BTC (valued at approximately $54.7 million at the time of writing) from over 100 investors.
The investors became suspicious when the interest, which was paid in yen, stopped being deposited in their account since April.
It was reported that the two traders managed to gain the trust and funds of investors by using chat groups on the Chinese messaging app WeChat, where many OTC offers for various cryptocurrencies were posted.
The newspaper also revealed that a criminal investigation has been opened by authorities against the two accused and that both suspects are now under arrest. It is yet uncertain if the two Chinese traders were operating an illicit loan scheme or just took bitcoins from investors they defrauded.
The WeChat platform has banned cryptocurrency transactions at the beginning of this month, so the traders probably started their operations before the ban.
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