Chinese student jailed for crypto rug pull, Bitcoin ready to jump to $80k

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Last Updated on 7 June 2024 by CryptoTips.eu

Beijing treats crypto scammers very harshly as a student found out this week. Especially now that more and more Chinese investors are trying to protect the value of their investments against devaluation, prison sentences are handed out to any apprehended scammer. A Chinese student was given a prison sentence of 4.5 years this week for a so-called ‘rug pull’.

Investing in crypto is becoming increasingly popular in mainland China. According to rumors on social media, Bybit allows Chinese residents to register as of this week, although crypto trading is still officially banned in the country.

Meanwhile, Bitcoin seems poised to make the jump to $80k. Given the many call options that investors in the United States have purchased, it is expected that this level will be reached by the end of June.

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Rug pull

Yang Qichao, a Chinese university student, was sentenced earlier this week to 4.5 years in prison for performing a so-called ‘rug pull’. Yang had started a small new cryptocurrency that he tried to market to potential Chinese investors as a “stablecoin,” or a currency pegged to the dollar. Because it was a new digital currency, the entry cost would be very low, Yang claimed.

He was able to convince some investors and everything seemed to be going well until he saw a purchase balance of around $300,000 for his new stablecoin. Yang quickly sold everything and the price of this so-called ‘stablecoin’ immediately collapsed.

A complaint was soon filed against him by investors after which the Chinese police arrested Yang. A court in Beijing sentenced him to an effective prison term of 5 years within days.

Bitcoin call options

The number of Wall Street investors purchasing Bitcoin call options with a strike price of $80k for the end of June continues to rise.

This means that the big wave of auto sell orders, which has settled around $74k (the current ATH), is about to be breached. At the time of writing, Bitcoin is trading for $71,500.