The US charges exiled Chinese tycoon Guo Wengui with a $1 billion crypto-related fraud

by Arthur · March 15, 2023

The US charges exiled Chinese tycoon Guo Wengui with a billion crypto-related fraud

Guo Wengui, an exiled Chinese billionaire, was arrested in New York on Wednesday for allegedly orchestrating a more than $1 billion fraud conspiracy involving cryptocurrency, according to the US Department of Justice (DOJ) and the Securities and Exchange Commission (SEC).

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Fast facts

Guo – known variously as Miles Guo, Ho Wan Kwok or “Brother Seven” – is charged by the DOJ with 12 counts of wire fraud, securities fraud, bank fraud and money laundering, suspected of soliciting investments in various entities through false statements and representations to “hundreds of thousands of Kwok’s online followers,” the DOJ said in a statement Wednesday.
Guo, along with other defendants, obtained more than US$262 million in victim funds through Himalaya Exchange, an alleged cryptocurrency ecosystem, the DOJ said, adding that it had seized approximately $634 million from 21 different bank accounts linked to the alleged fraud.
The DOJ alleges that Guo lied and promised his victims greater returns if they backed a number of his ventures, including GTV Media Group Inc., a media company Guo formed in 2020 with Steve Bannon, a former adviser to US President Donald Trump.
Guo, known for his criticism of the Chinese Communist Party, was also charged by the SEC on Wednesday for his involvement in unregistered and fraudulent offerings that raised more than $850 million.
The SEC said one of the offerings raised hundreds of millions of dollars from investors through a crypto-asset security referred to as “H-Coin” or “Himalaya Coin” by falsely stating that 20% of H-Coin’s value was backed by gold and that “he would personally compensate investors for potential losses.”
“In reality, Guo exploited the hype and lure surrounding crypto and other investments to sacrifice thousands and finance his and his family’s lavish lifestyle,” Gurbir S. Grewal, director of the SEC’s Division of Enforcement, said in a statement Wednesday. CNN reported that Guo had been denied bail in a hearing the same day.
“Kwok is accused of lining his pockets with the money he stole, including buying himself and his close relatives a 50,000-square-foot mansion in New Jersey, a $3.5 million Ferrari and even two mattresses of $36,000, and to finance a $37 million luxury yacht,” U.S. Attorney Damian Williams said Wednesday in the DOJ statement.