In China, six people were arrested on suspicion of deceiving around 3,000 investors for $47 million by selling tokens reportedly backed by high-priced Tibetan tea.

The group of suspects organized a company called PEB, writes the local newspaper Guangdong Daily. Since January 2017, the firm haa been selling tokens Pu'er Coin. According to the project website, tokens were backed with a certain amount of very expensive Tibetan tea. Tokens traded on the Chinese crypto exchange Jubi, which was closed in September 2017 due to tightening of the cryptocurrency regulation in China. Additionally, investors were offered an annual income of 12%, if they do not sell tokens within a year.

As the police investigation showed, in fact the firm had an extremely limited amount of tea on offer. At the same time, the company launched large-scale advertising in social networks and hotels, promising a quick income. With the help of market manipulation PEB inflated the price of its token making it jump up 20 folds during 2017. In April 2018, the company received a warning and a fine of $20 million from the market regulator of China, which is responsible for fair competition and fair trade.

The investigation of the "tea business" is just one example of the fight against illegal cryptocurrency fundraising in China. A month ago, Xian police arrested organizers of the cryptocurrency Ponzi scheme, which raised $13 million from 13,000 investors. Those who invested $480,000 in the project, were promised an income of $13,000 per day. To create the impression of an international blockchain start-up, the organizers even hired a foreigner who played a role of the head of the company.