FBI agents arrest Chinese billionaire in exile and charge him with massive crypto fraud • The Register
Meet the newest addition to the crypto rogues gallery: Ho Wan Kwok, aka Guo Wengui, aka Miles Guo, who the US Department of Justice arrested Wednesday because investigators described a “sprawling and complex scheme”… to invest in various companies and programs through false statements and representations to hundreds of thousands of Kwoks online followers.”
Kwok/Guo has an intriguing backstory. The native Chinese became a real estate entrepreneur and was considered a billionaire. He left China in 2014 amid several controversies surrounding his interests and actions, and in 2017 he was based in New York and became a harsh critic of the Chinese government, circulating vivid theories about his problems and Beijing’s role.
His position seems to have angered Beijing: the Australian Strategic Policy Institute think tank uncovered a state-backed misinformation campaign that portrayed him as “corrupt and untrustworthy”.
While living in the US, Guo met a new friend: Steve Bannon, the right-wing provocateur who served as CEO of Donald Trump’s first US presidential campaign and later became a senior White House counsel. Guo has been a fervent defender of TrumpLand on social media, becoming a member of Trump’s private club Mar-a-Lago and supporting ventures Bannon was involved in.
When Bannon was arrested for fraud in 2020, he was on Guo’s yacht.
Guo also sought investors in other companies, and those efforts are the source of the Justice Department’s beef.
One of Guo’s operations was called the Himalaya Exchange. The DoJ states that the exchange offered “an alleged stablecoin called the Himalaya Dollar … and a trading coin called the Himalaya Coin,” and that the Himalaya Exchange promised investors it would cover any losses if the coin’s value declined.
Those promises were clearly fiction, but Himalaya Exchange still managed to raise around $262 million from investors — many of them lured by misinformation on Guo’s social media accounts.
Himalaya Exchange later conducted labyrinthine transactions apparently designed to line the pockets of Guo and his associates.
As a result, the Justice Department on Wednesday filed a dozen charges against Guo and his friends related to wire fraud, securities fraud, bank fraud and money laundering. The Feds also revealed that they seized around $634 million from bank accounts linked to Guo and his friends.
“We allege that Guo was a serial scammer who raised more than $850 million by promising investors inflated returns on alleged crypto, technology and luxury goods investment opportunities,” said Gurbir S. Grewal, director of the Department of Enforcement by the US Securities and Exchange Commission.
“In reality, Guo used the hype and attraction surrounding crypto and other investments to bully thousands and fund his and his family’s lavish lifestyle.”
How Guo will defend himself is unclear. He filed for bankruptcy in February, claiming assets of less than $100,000 and liabilities of between $100 million and $500 million. ®