Philippines police acting on a tip from the Chinese embassy had a busy day last week during an operation after they had to arrest 273 people. Although they were after four people, on arrival, they found 273 people all employees of a crypto firm responsible for defrauding thousands of Chinese nationals. The latter were all employees of a scheme involving fraudulent firms operating in the crypto space.
The 277 people arrested are employees of Grapefruit Services Inc. The latter is a service provider for Golden Millennial Quickpay Inc. Ltd. whose permits authorize it to work in the Cagayan Economic Zone Authority (Ceza) zone. However, Golden has a presence in Pasig City hence the raid.
Grapefruit Services Inc. is in Violation of All Laws in Place
Although Golden Millennial Quickpay firm has a valid license to operate in CEZA as an offshore crypto firm, its license limits it to the special economic zone. The latter was put in place by CEZA. CEZA is in charge of a Freeport, which is the Cagayan Special Economic Zone found in the north. The latter is designated zone for both foreign and local investors to make investments and in 2018 April, CEZA started licensing crypto firms to operate in the area.
At the moment, 20 firms have licenses from CEZA to operate only in that zone. However, for Golden Millennial Quickpay Inc., the rules didn’t apply. Its service firm was found in operation in Pasig City in One Corporate Center in Ortigas Center. The latter was found in violation of operating outside the designated zone and also violated SEC’s laws. All of the employees had IDs which only gave them rights to work in the special economic area.
Per SEC documents, Grapefruit isn’t allowed to operate any virtual currency exchange or any business related to fiat currency. Furthermore, it’s also prohibited from running an investment firm, act as an investment advisor, or offer services as a broker or securities dealer. With its involvement in all the above, per the tip-off, their activities led to many Chinese investors losing cash to fraudulent crypto investment schemes.
It led to the raid, and now the 277 have their passports revoked by the Chinese embassy since all were Chinese nationals. Now they are set to be deported back to mainland China.