Bitcoin Theft: Police make first major arrest in Henan province
With China looking to clamp down on the use of virtual coins, police in Henan province have arrested a man in connection with a bitcoin theft worth about 20 million yuan. It's the country's first major break-through in the area of virtual coins. Xu Xinchen has more.
Bitcoin, invented in 2009, is a series of computer codes that are valued by traders and investors. Many saw a great opportunity to make gains when the digital coins started to skyrocket in value this year, but for one individual, the leaves started to fall off the money tree far too easily. All of his coins stored in the cyber world just disappeared.
MR.WU THEFT VICTIM "I asked, why were my bitcoins all stolen after using the method you taught me to save them?"
Mr. Wu lost 189 bitcoins in late July, at a time when each one was valued close to 20,000 yuan, or about three thousand US dollars. And the thief was none other than one of his online associates, surnamed Dai. The two met in a social media group for bitcoin investors, with Dai acting as host. Dai recommended that Wu keep all his bitcoins in a digital wallet application instead of bitcoin exchanges and he even helped him install the digital wallet on his computer. However, in doing so, Dai understood how to breach the wallet, and was then able to find out the user names and passwords for anyone who logged in. And Wu was not his only victim.
ZHANG HONGZHOU HENAN ZHONGYUAN OILFIELD PUBLIC SECURITY BUREAU "The group chat host sent information stating that it was not safe to keep bitcoins on exchanges, and contacted the victims to use the digital wallet he sent. The suspect was then able to steal all the bitcoins and transfer them into his own accounts."
According to local police, Dai cheated a total of three bitcoin investors in the same way to the tune of 20 million yuan. It took the police three months to come up with all the evidence they needed, but it marks the first successful crack-down on bitcoin theft in China. Bitcoins have been under increasing scrutiny in China as regulators believe the risks involved are too great. China doesn't recognize them as a legitimate currency and the country's three major bitcoin trading platforms have been shut down. Xu Xinchen, CGTN.