Crypto Scams, Campus Controversies & Market Manipulation: Asia’s Dark Crypto Hour
Crypto Exchanges Accused of ‘Grooming’ Students in China
In a chilling echo of China’s infamous “naked loans” scandal, major crypto exchanges are facing backlash for allegedly targeting university students with risky trading incentives.
Bruce Xu, co-founder of ETHPanda, claims centralized platforms issued non-withdrawable trial funds to students, allowing them to trade futures. If profitable, students kept the gains, while high returns shared on social media earned them further rewards—a practice Xu calls “grooming the next generation of degens.”
Crypto media outlet BlockBeats condemned the tactic, urging exchanges to stop all student trial fund promotions. The criticism intensified amid rumors involving Bitget, whose February campus ambassador program was misinterpreted. Bitget’s Asia head, Xie Jiayin (Smith Tse), clarified it was meant for Web3 education, not speculative trading, and was taken down within 16 hours.
Meanwhile, Bybit CEO Ben Zhou publicly refuted allegations of visiting campuses with trial funds. He challenged the crypto community to produce proof, decrying the spread of “unsubstantiated rumors.”
A Painful Reminder of China’s Campus Lending Crisis
These revelations stir memories of the 2010s’ predatory campus lending. Companies like Qufenqi handed out loans to students using only a student ID, resulting in crippling debts, black-market borrowing, and exploitation. In some extreme cases, students were forced to provide nude images or even sexual favors as repayment collateral. The scandal ultimately led to a nationwide crackdown on campus loans in 2016–2017.
Qufenqi, now rebranded as Qudain and listed on Nasdaq, has never fully recovered—its stock remains down over 90% from its peak.
Fake Indian Women Scam 67,000 Men in Massive Romance Scheme
In a case that sounds more like a Netflix thriller than a courtroom proceeding, nine Chinese nationals have been jailed in Shandong Province for defrauding nearly 67,000 Indian men in a crypto-fueled romance scam.
The group posed as wealthy Indian women, using glamorous lifestyle photos and chat apps—a pig-butchering-style scam that netted 517 million rupees (over $6 million) between June 2023 and January 2024. The scammers converted the stolen funds into USDT, later laundering them into yuan via third-party services.
This isn’t their first rodeo. In March 2024, two other scammers impersonated Malaysian fashion designers to scam Turkish men, supported by a 10-person team operating during Turkish business hours.
A staff member, “Xiao A,” said she played “Lisa,” a sweet-looking, divorced Malaysian-Chinese fashion designer with a fake boutique, Amazon storefront, and luxury lifestyle. The group even followed a scripted four-day playbook to manipulate targets emotionally.
Philippines SEC Opens Crypto Sandbox for Innovation
In a bid to balance innovation with regulation, the Philippines Securities and Exchange Commission (SEC) has launched a Strategic Sandbox (StratBox). This controlled environment will allow crypto startups to test products under official supervision.
The StratBox is open to both crypto and non-crypto fintechs, aiming to collect data that could shape future regulations. It’s a timely move as Circle’s USDC integrates with GCash, the country’s leading digital wallet. With IPO talks swirling, GCash’s crypto expansion could significantly boost stablecoin adoption in Southeast Asia.
South Korean Officials Uncover Sophisticated Crypto Pumping Schemes
South Korea’s top financial regulators have referred multiple suspects for prosecution in connection with two aggressive market manipulation strategies—exploiting the 24/7 nature of crypto trading.
“Racehorse at X Hour” Tactic:
This method involves pre-loading large buys before exchanges reset daily price metrics (e.g., at midnight or 9 AM), followed by rapid buy orders up to two per second, giving the illusion of demand and triggering fear of missing out (FOMO) among retail investors.
“Cage Pumping”:
This involves manipulating token prices on exchanges that suspend deposits and withdrawals, removing arbitrage and liquidity. Once price spikes are achieved, unsuspecting traders pile in, only for prices to crash once access is restored.
Regulators warned that manipulated tokens surged 10x in value before collapsing and reminded traders that such manipulation carries a minimum of one year in prison and fines up to five times the illegal profits.
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