China has surely been making noise for a lot of reasons. While it continues to exert its hostility towards the crypto industry, banks in the region weren’t doing any good. Recently, the citizens of the country were hit with one of the biggest banking scandals. Due to this, four rural banks in the Henan province were forced to freeze all deposits back in April. Following this, a multitude of individuals across the country protested and some of them even turned violent. While the local authorities affirmed that affected customers would be repaid, the latest news would bring more respite to the victims.
Earlier today, it was brought to light that the police in Xuchang city of Henan province had arrested over 234 suspects involved in the scam.
As per the China law enforcement, a criminal gang that was overseen by Lv Yi took control of the aforementioned banks. In order to lure in investors and funds, they went on to offer rates as high as 18 percent. It was revealed that the funds brought into the bank amounted to a high of $5.8 billion or 40 billion yuan.
Following this arrest, local authorities have been working towards recovering funds that were lost. It should be noted that back in July, authorities in China had begun repaying its customers. However, they started with those who had deposited less than $7,227 or 50,000 yuan in the banks.
Will this banking fraud direct China towards crypto?
Scams like this one show how the innocent can be exploited. The crypto-verse was started for the average Joe with the intention of bringing in more financial freedom. However, China has been hostile toward the industry.
Despite the government’s attempts to repay the victims, those with 500,000 yuan would be paid only 500,000 yuan. The rest would be repaid following the recovery of the funds. Speaking to South China Morning Post, a woman who had deposited a whopping 1.11 million yuan roughly $161,000 revealed that she hadn’t even started the application process as she wouldn’t be able to retrieve all her funds. She added,
“Even if they retrieve 10 billion yuan, what if they just told us that they only retrieved 1 billion yuan?”
Banks have been one of the most trusted financial institutions for decades now. However, news like this certainly questions their credibility. Therefore, several in the community speculated that China’s citizens could be yearning for alternatives.