Feds arrest and charge exiled Chinese billionaire over massive crypto fraud
This one has it all: Donald Trump’s inner circle, a Beijing bot backlash, conspiracy theories, and more
Meet the newest member of the crypto rogues' gallery: Ho Wan Kwok, aka Guo Wengui, aka Miles Guo, whom the US Department of Justice on Wednesday arrested over what investigators have described as a "sprawling and complex scheme … to solicit investments in various entities and programs through false statements and representations to hundreds of thousands of Kwok's online followers."
Kwok/Guo has a fascinating back story. Born in China, he became a property entrepreneur and was rated as a billionaire. He left China in 2014 as multiple controversies swirled around his interests and actions, and by 2017 he was resident in New York and became a strident critic of the Chinese government, circulating vivid theories about his troubles and Beijing's role in them.
His position appears to have annoyed Beijing: think tank the Australian Strategic Policy Institute detected a state-backed misinformation campaign depicting him as "corrupt and not to be trusted."
While living in the US, Guo made a new friend: Steve Bannon, the right-wing provocateur who served as CEO of Donald Trump's first campaign for election as US president and later became a senior White House counsel. Guo was a fervent defender of TrumpLand on social media, became a member of Trump's private club, Mar-a-Lago, and supported ventures in which Bannon was involved.
When Bannon was arrested in 2020 on charges of fraud he was on Guo's yacht.
Guo also sought investors in other enterprises, and those efforts are the source of the Department of Justice's beef.
One of Guo's operations was called Himalaya Exchange. The DoJ states the Exchange offered "a purported stablecoin called the Himalaya Dollar … and a trading coin called Himalaya Coin" and that Himalaya Exchange promised investors that if the value of the coin fell it would cover any losses.
Those promises were clearly a fiction, but Himalaya Exchange nonetheless managed to raise around $262 million from investors – many of them lured by misinformation on Guo's social media accounts.
Himalaya Exchange later conducted labyrinthine transactions that appear to have been aimed at lining the pockets of Guo and his associates.
Which is why the DoJ on Wednesday charged Guo and pals with a dozen charges related to wire fraud, securities fraud, bank fraud, and money laundering charges. The feds also revealed that they had seized around $634 million from bank accounts linked to Guo and pals.
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"We allege that Guo was a serial fraudster, who raised more than $850 million by promising investors outsized returns on purported crypto, technology and luxury good investment opportunities," stated Gurbir S. Grewal, director of the US Securities and Exchange Commission's Division of Enforcement.
"In reality, Guo took advantage of the hype and allure surrounding crypto and other investments to victimize thousands and fund his and his family's lavish lifestyle."
Just how Guo will defend himself is anyone’s guess. In February he filed for bankruptcy, claiming assets of under $100,000 and liabilities somewhere between $100 million and $500 million. ®