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Chinese Crypto Scam Uncovered in the Philippines after Police Raid

The local authorities in the Philippines have reportedly raided the offices of an alleged cryptocurrency scam and arrested the scammers who were targeting investors in China.

According to a Sept. 15 report by local news outlet Inquirer, the raid was initiated by the agents from the Bureau of Immigration, the Presidential Anti-Corruption Commission and the National Police’s Integrity Monitoring and Enforcement Group, and targeted the offices of Grapefruit Services Inc. on the 37th floor of ‘One Corporate Center’ in Ortigas Center, Pasig City.

Grapefruit Services Inc. is a subsidiary of Golden Millennial Quickpay Inc. Ltd., an offshore cryptocurrency company licensed by the Cagayan Economic Zone Authority (Ceza). According to sources familiar with the matter, government agents arrested 227 employees of the firm during a raid in Pasig City as they were suspected for operating a cryptocurrency scam designed to dupe investors in mainland China.

The local authorities in the Philippines came to know about this scam after receiving a tip from the Chinese embassy, which claimed that the company has already duped thousands of investors in China. As per Immigration Commissioner Jaime Morente, all the arrested employees of the firm were Chinese and the Chinese government canceled their passport, which made them illegal workers in the Philippines.

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Operating Outside of the Designated Zone

Grapefruit Inc was registered in Ceza but found to be operated out of the designated zone. The company was operating in Metro Manila and other cities as well. Ceza is a government initiative aimed to attract foreign and domestic investors and firms to operate and flourish without regulatory restriction in the region of Cagayan province.

Ceza has granted licenses to more than 20 firms to operate in the Cagayan Special Economic Zone and Freeport. Most of these firms were either FinTech solutions providers or crypto exchanges.

After going through the corporate documents of the firm and employees, the Inquirer came to know that the firm had a capital of 1 million Philippine pesos and all 277 employees who had been working there had Ceza visa. This ultimately means that neither the firm nor its employees were allowed to operate and work outside the special economic zone in the Cagayan province.

The registration documents of the firm from the PSEC said the company shouldn’t be undertaking the activities as a security broker or investment advisory company. The company is now restricted from operating on fiat as well as on crypto exchanges.

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