Triad Link Triggers Crypto Fraud Warning from Macau Regulator

Authorities in Macau have issued a statement of concern after it emerged that a cryptocurrency project was associated with a former notorious gang leader and also had links with Cambridge Anaytica, the company behind the Facebook data scandal.

The Monetary Authority of Macau (MAM) has issued a statement of concern to warn the public about “fraud and criminal activities” after reports linked a notorious former Triad boss to a Macau-based cryptocurrency venture connected to Cambridge Analytica, the British company behind the Facebook data privacy scandal.

The MAM took action after it emerged that former 14K gang boss “Broken Tooth” Wan Kuok-koi was associated with the Macau Dragon Group. The latter had enlisted the services of Cambridge Analytica to promote its Dragon Coin. The cryptocurrency was designed to allow gamblers to move money to casinos within Macao, a special administrative region of China.

The MAM said in a statement:

“The media has reported that a Macau company was involved in an ICO [initial coin offering] recently. Monetary Authority of Macau reminds all Macau residents that cryptocurrencies are virtual products, but not legal currencies or financial tools. Residents should be aware of fraud and criminal activities associated with cryptocurrencies.”

Broken Tooth is one of the key figures in Asian organized crime circles and has been incarcerated for more than ten years on a string of criminal convictions, including leading the14K Triad in Macau.

The MAM further stated:

"Monetary Authority of Macau reiterates that any institution providing regulated financial services such as currency exchange, cross-border fund transfer, and financial exchange platforms without permission violates relevant provisions of the Financial System Act.”

Dragon Group’s $500 million ICO

Dragon Group announced last September it planned to raise at least $500 million through an ICO.

The project would allow members of the public to become casino shareholders or own stocks in a public junket, as stated at the time by Chakrit Ahmad, CEO of Wi Holding, the company managing the technology side of the ICO. He added that investors would have the opportunity to own shares in a gambling company that utilizes blockchain technology to generate revenue.

But the MAM quickly poured cold water on Dragon's ICO and prohibited financial institutions from serving digital currency-related businesses.