After months of investigating, Thai police have arrested the prime suspect in a major fraud case involving cryptocurrency. The scam, which revolved around the fraudulent Dragon Coin (not to be confused with DragonChain), allegedly resulted in a loss of 800 million Thai baht (approximately $24 million USD) in Bitcoin, largely at the expense of unknowing investors.
The Dragon Coin Scam
Finish investor Aarni Otava Saarimaa and his Thai business partner Chonnikan Kaewkasee brought a complaint to the Thai Crime Suppression Division (“CSD”), claiming that they had been defrauded by seven individuals who had conned them into investing $24 million worth of Bitcoin into what turned out to be sham companies. The alleged scammers persuaded Saarimma and Kaewkasee to invest most of their funds into a gambling-related crypto token known as Dragon Coin (DRG). DRG is advertised as “a frictionless, low-cost & transparent alternative financial mechanism within Casinos, to enhance the age-old gaming industry” – but according to Thai authorities, it’s a scam developed to defraud trusting cryptocurrency investors.
The individual charged for the crime was Prinya Jaravijit, who apprehended by Thai police upon his return back to Thailand from the United States where he had fled to avoid possible prosecution. By then, the Thai Money Laundering Office has confiscated funds upwards of $6 million from Jaravijit’s family and other individuals connected to the scam. Despite investing millions, Saarimma and Kaewkasee never received a penny from their so-called investment. Jaravijit and his associates never provided any documentation for the alleged investment, and Saarimma and Kaewkasee were never invited to attend any shareholders meetings.
In short, there appears to be no evidence whatsoever that Dragon Coin engaged in any legitimate, good-faith business transactions with the trusting investors. This is true despite the fact that authorities have confirmed that the investors’ funds were withdrawn from BTC wallets known to be owned by Saarimma and Kaewkasee. However, rather than investing in business development for the outwardly-legitimate Dragon Coin, Saarimma and Kaewkasee’s Bitcoins were just converted into baht and spent by the scammers.
Combating Fraud in Cryptocurrency Investments
Thai authorities issued an arrest for Jaravijit months ago, giving him until September 17th to surrender himself to local Thai authorities. When he failed to return to Thailand from the U.S. where he had fled, he was once again ordered to return by October 8. But, consistent with prior practice, Jaravijit remained at large.
Cryptocurrency scammers commonly evade prosecution by leaving – or in some cases, never even entering – the jurisdiction in which they committed their crime. However, increasing international cooperation in cryptocurrency law enforcement is making it harder and harder for financial criminals to evade justice.
After he failed to return to Thailand by October 8, Thai Foreign Ministry took measures to revoke Jaravijit’s passport at the request of the CSD. Doing so made Jaravijit’s continued residence in the U.S illegal, which facilitated the involvement of U.S. authorities. He was arrested and delivered to the Thai Embassy, which arranged for Jaravijit’s prompt return to Thai authorities.
Cryptocurrency investors around the world are keeping a close watch on how the Dragon Coin crypto-crime is being handled by Thai authorities. Fraud has been a major issue in cryptocurrency markets almost since their inception, and even the most dedicated fintech investor must still be cautious putting money into new cryptocurrency-based projects. As law enforcement in this field becomes more effective, we are sure to see a positive impact on cryptocurrency markets worldwide.