Home / Capital & Crypto / $1.3 Million Bitcoin Scam Swindles Victims in Thailand. Are Tougher Crypto Regulations Necessary?

$1.3 Million Bitcoin Scam Swindles Victims in Thailand. Are Tougher Crypto Regulations Necessary?

Last Updated March 4, 2021 2:53 PM
Ben Brown
Last Updated March 4, 2021 2:53 PM

A virtual bitcoin mining farm in Thailand has allegedly scammed users out of 42 million baht (approximately $1.35 million), according to a report in the Bangkok Post. 

30 victims have filed a complaint against the company, CryptoMining.Farm. Although police believe the scam may have hit up to 140 individuals.

It comes just months after a group of Thai siblings was accused of defrauding an investor of $24 million in bitcoin. Although Thailand is a booming market for cryptocurrencies, is it time for tougher regulations to crack down on scams and frauds?

The $1.35 Million Bitcoin Scam, Explained

The victims claim they were tricked into investing with the promise of outrageous 70% returns.

The website, which is reportedly owned by Vietnam-based Lifetime Technology Co. Ltd. ,  offers virtual bitcoin mining contracts to unsuspecting investors.

Virtual mining works by leasing shared mining power from a larger data center. In theory, it allows you to profit from cryptocurrency mining without purchasing or running the hardware yourself.

In reality, many virtual mining operations are shady, opaque, and outright scams. They boast inflated profit calculations and hide information about the true mining operation.

“Guaranteed” 70% Annual Returns

One victim said he was promised he could withdraw his money at any time. But that soon changed:

“From August the owner began imposing conditions for withdrawing the money. Then at the start of this month, the site announced it would start paying back investors in 84 installments — which would take over seven years to complete.”

The timing coincides with the plunging profitability of bitcoin mining. Research firm Diar  reported that bitcoin mining turned unprofitable in September 2018.

Tougher Crypto Regulations Needed?

As CCN.com previously reported, Thailand’s deputy prime minister Wissanu Krea-ngam has called for tougher crypto regulations. Speaking in Bangkok last year, he said it had become increasingly difficult for authorities to identify bad actors.

In August 2018, it was alleged that Thai scammers conned a Finnish millionaire out of 5,564.4 bitcoins (worth $24 million). Aarni Otava Saarimaa was tricked into buying a cryptocurrency called DragonCoin. 

Saarimaa sent the funds via bitcoin to the scammers’ wallets. Instead of honoring the investment, the frauds cashed it out to buy property in Thailand. Among the alleged scammers was soap actor Jiratpisit ‘Boom’ Jaravijit.

Thai actor Jiratpisit ‘Boom’ Jaravijit arrested for his alleged involvement in $24 million bitcoin scam. Image source: Khaosod English

Thailand has already passed legislation to clamp down on initial coin offerings (ICOs). But is this recent scam proof that tougher rules are needed?

Thailand Still a Leader in Crypto Adoption

Despite the scam, Thailand remains at the forefront of blockchain and cryptocurrency adoption.

As CCN.com reported, the Thai stock exchange just applied for a cryptocurrency license. If passed it would allow traders to buy and sell digital assets on the country’s largest exchange.

Thailand is also embracing the power of blockchain. The country’s largest opposition party recently held an election using blockchain technology. Thailand is even considering tapping blockchain to track VAT payments.

With rapid growth and adoption, however, comes the higher likelihood of scams and frauds. As an emerging cryptocurrency pioneer, Thailand must quickly learn how to balance growth with regulation.