Double Coin, New Scam Method in China Exposed

A disturbing new scam method involving virtual currency has recently come to light in Wuhan, China, where unsuspecting victims were targeted through a deceptive strategy known as the Double Coin scam. 

This article will walk you through how the scam worked, how authorities uncovered it, and what you can do to protect yourself from similar schemes. If you're active in the crypto space, especially with peer-to-peer (P2P) transactions, this is a warning worth reading.

Double Coin, New Scam Method

Recently, police in the Qingshan District of Wuhan cracked a virtual currency Double Coin fraud case involving a trick known locally as coin-scraping. 

The case marks the emergence of a new scam method in crypto circles, where scammers pretend not to receive transferred cryptocurrency and refuse to pay for it in return.

A local resident, Mr. Liu, was the unfortunate victim of this fraudulent setup. He had arranged a face-to-face deal with two individuals, Ye and Li, who claimed to offer cash-out services for virtual currencies. 

On April 11, at a designated location in Qingshan, Mr. Liu transferred a certain amount of cryptocurrency, expecting to receive RMB 200,000 in return. But the moment the transaction was complete, the fraud unfolded.

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How the Double Coin Scam Works

Double Coin scam is a twist on traditional crypto fraud, and here’s how it usually plays out:

1. Trust is Built First

Scammers claim to provide a service, such as cashing out virtual currencies into fiat money. Victims are lured in with seemingly legitimate offers and reassured through face-to-face meetings or official-sounding platforms.

2. Crypto Transfer is Made

The victim sends the agreed-upon cryptocurrency to the scammer's wallet address. Everything looks legitimate at this point, especially if the meeting is in person or arranged via trusted channels.

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3. Denial and Delay

Once the crypto is sent, the scammer denies receiving it, a key element of the Double Coin method. Even though the transaction is visible on the blockchain, the scammer acts confused, blames a delay, or outright lies.

4. Legal Intimidation

In this case, Ye and Li tried to use legal jargon and their background in law-related fields to stall the police investigation and intimidate the victim into dropping the complaint.

5. Victim Left Empty-Handed

The goal? Walk away with both the cryptocurrency and avoid paying any fiat in return, hence the name Double Coin, as the scammer tries to get both sides of the trade.

How the Authorities Handled the Double Coin Scam

Thankfully, Mr. Liu did the right thing, he went straight to the Hongwei Road Police Station to report the fraud. 

The Cyber Security Brigade stepped in and traced the crypto transaction through technical analysis. They confirmed that the virtual currency had indeed been transferred successfully to the scammer’s account.

When faced with solid evidence, the suspects' psychological defense crumbled. Despite initially using legal tricks and denying wrongdoing, Ye and Li eventually confessed to the Double Coin scam.

As of now:

- Both suspects are detained and facing legal consequences.

- The full amount of RMB 200,000 was successfully recovered and returned to the victim.

- The case remains under investigation for any possible wider implications or related incidents.

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Prevention Tips for Double Coin Scam

To avoid falling into the same trap, here are some critical tips for Double Coin scam:

1. Be Skeptical of Peer-to-Peer Cash Deals: If someone offers to exchange cryptocurrency for fiat cash, especially offline, treat the deal with extreme caution.

2. Always Use Escrow Services: When possible, use trusted escrow services or trading platforms that protect both sides until the transaction is confirmed.

3. Verify Transactions on the Blockchain: Blockchain is transparent. If the other party claims they didn't receive the funds, check the transaction hash on a block explorer.

4. Get Everything in Writing: Use messaging apps or emails to confirm agreements. This written evidence can help in legal proceedings if things go wrong.

5. Report Suspicious Behavior: If you sense any foul play, report it immediately. The faster law enforcement can respond, the better the chance of recovering funds.

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Conclusion

The Double Coin scam is a new and dangerous tactic in the crypto world. By pretending that crypto transfers didn’t go through, scammers try to walk away with both the digital and fiat currency involved. Thanks to quick police work, the fraud in Wuhan was stopped and the victim got his money back.

But the bigger lesson here is this: in the world of decentralized finance, you are your own bank, which means you also need to be your own security guard. Be alert, do your research, and always double-check who you're dealing with.

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FAQ

What is the Double Coin scam method?

It’s a type of fraud where the scammer receives a cryptocurrency transfer but then falsely claims they never got it. They refuse to pay the agreed amount in return, aiming to get both sides of the trade, hence the term Double Coin.

Is crypto trading legal in China?

No. Virtual currency trading is considered an illegal financial activity in China and is not protected by legal frameworks, making any such transaction risky.

Can transactions on the blockchain be reversed?

No. Once a blockchain transaction is confirmed, it cannot be undone. That’s why confirming the legitimacy of the recipient before sending funds is critical.

What should I do if I get scammed?

Immediately report the incident to your local authorities. Provide them with all transaction details, chat records, and wallet addresses involved. The quicker you act, the better the chances of recovery.

How can I protect myself during a crypto trade?

Use trusted platforms with built-in protections, avoid peer-to-peer deals with strangers, and never complete a transaction without proper verification and written confirmation.