International money laundering case allegedly involving the ICO Dragon Coin

By Christine Duhaime | August 18th, 2018

According to the federal Thai police, as reported here in the Bangkok Post, the Dragon Coin (which is an ICO), was used for or was involved in it seems unwittingly, an international fraud and money laundering scheme. The Dragon Coin is an ICO allegedly launched with the involvement of a former Triad boss and money launderer named Broken Tooth (reported here by the South China Morning Post). The real name of Broken Tooth is Wan Kuok-koi.

According to the Thai authorities, a man from Finland, Aarni  Saarimaa, sent over 5,500 Bitcoin to invest in certain projects and part of the investment involved an investment in Dragon Coin. Saarimaa appears not to have used a third party escrow agent and the Bitcoin was allegedly diverted to seven Bitcoin wallets belonging to fraudsters who used some of it to buy land in Thailand. The rest was cashed out of a digital currency exchange (it is not known which exchange) and then transferred to 51 bank accounts held in the names of the alleged fraudsters. The bank accounts were frozen in Thailand but no action has been taken to freeze the Bitcoin wallets at the digital currency exchange.

An ICO is an initial coin offering meaning the issuance of a new digital currency that trades on certain digital currency exchanges. The Dragon Coin raised US$320 million from investors. According to a media report, Broken Tooth has moved on to develop a second Blockchain project in Cambodia whose purpose will be to offer services to casinos and promote Chinese culture. Since his release from jail for financial crimes and organized crime activities, Broken Tooth has become the chairman of The World Hongmen History and Culture Association, which connects Chinese foreign nationals internationally for business purposes.

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