Himalaya Exchange Scam and Miles Guo Case Explained

We often ask our friends in the decentralized world that if there are centralized exchanges why we hate them? The big reason behind it is lack of the seeds and the keys that they offer to their crypto customers and they want to have control over your funds.

A lot of exchanges basically create fake pools and just keep the ledger that keeps track of user funds. So the money comes in and goes and exchanges continues to operate till it dries out with the funds. So the himalaya exchange worked the same way.

In this post we are going to take a look at their scam and how the owner Miles Guo ended up being caught in this drama.

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Himalaya Stablecoin and Himalaya Coin on Fake Blockchain

A lot of exchanges out there have their own blockchain and also have their own stablecoin. In case of binance it used to be BUSD but it got closed due to SEC and so does houbi and many others. But most of them are not really pegged in true sense or compliant with the USD. But they continue to operate with the customer trust and end up swapping at the P2P end.

In case of himalaya exchange they had the fake blockchain and instead they maintained a pool and ledger where they looged the fake stablecoin and coin transaction. This was done to give this whole operation a feel for real or fake funds into the ecosystem. It was a setup from the start and they ended up getting caught when enquiry was setup by the SEC and the Chinese authorities.

Crypto Friendly Banks and the Multiple Accounts

Miles has worked with many crypto friendly banks and also have managed to divert the funds through the 500 accounts and the 80 individuals and organization that happened to be real. Which goes to show the people were from the around the world who trusted on this system here and ended up losing the money to this scam.

The way this fraud worked the funds were in the USDT and also the funds happened to be in the fraud scheme and the money laundering. So we can see how that sort of the arrangement it could have helped those individuals who wanted to shift the USDT funds and that too for the reason of the money laundering.

Wrapping up the Case for Miles Guo

A lot of amount of the miles has managed to move to the hayman capital fund and also there are some of the funds being moved to other management asset systems and the funds systems. So there is definitely the legal angle involved which would hurt these organizations too. And that means this would not be ending well for the Miles Guo.

Miles has agreed to compensate the investors and also has agreed to give some gold backed compensation in the due process. So that goes to show you chinese authorities have managed to handle this case but the next turn would be from the SEC as they would be fighting for the inevstment of the people in USA which is going to make this case more complicated at the end.

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Miles Guo has scammed people and also has opened up the investment option for those who wanted to do the money laundering. And eventually he got caught once the regulatories found the loophole in whole operation. So all bad things eventually end but they take more time and we end up having damage over the years.

Posted Using InLeo Alpha