Chinese businessman linked to Steve Bannon found guilty of running billion-dollar crypto scam

Guo Wengui, a Chinese businessman linked to Steve Bannon, was found guilty on nine of the 12 criminal counts for charges including fraud, racketeering, and money laundering.

In a statement published today, July 17, US Attorney Damian Williams announced the “end of Guo’s schemes.” Guo had defrauded investors to fund his lifestyle, including a yacht worth $37 million. Williams finally guaranteed that Guo would “face decades in prison.”

Guo faces sentencing on November 19 and has been in prison since his arrest in March 2023.

Guo’s relationship with Bannon is primarily based on their co-founding of GTV Media Group, which owned GTV, a video-sharing platform. Bannon was an American media executive, political strategist, and former investment banker who served as the White House’s chief strategist for former President Donald Trump’s administration.

In 2020, Bannon was arrested in Guo’s yacht for conspiracy to commit wire fraud related to the “We Build the Wall” crowdfunding project, which was aimed at building a border wall between the US and Mexico.

Bannon is serving a four-month prison sentence for contempt of Congress concerning his role in rallying demonstrators to come to Washington, DC, on January 6, 2021. Bannon was later pardoned by Trump, shortly before leaving office.

Guo’s forays into crypto managed to raise millions of dollars from investors for a token he called “Himalaya Coin” or H-Coin (HCN), which he claimed was 20% backed by gold. This coin was sold primarily through Himalaya Exchange. The SEC noted that Guo was “a serial fraudster” who took advantage of crypto’s allure, talking retail investors into raising as much as $500 million.

A recent statement from Jesse Brown, former CEO of Himalaya Exchange, indicates that H-Coin was never onchain or didn’t even qualify as a crypto product.

On page 10 of the Himalaya Coin whitepaper, a section on “structural considerations” describes the coin’s purchasing system as being based on user credit, with investors being required to purchase said credits through Himalaya Exchange’s native stablecoin, Himalaya Dollar. Both the stablecoin and Himalaya Coin were not provided with onchain addresses, nor were there any standard disclosures for its smart contract functionalities.

This development comes at an important time in the run-up to the 2024 elections, with Trump leading as a candidate, as shown by his massive lead for odds on Polymarket. Trump’s popularity was significantly bolstered by the assassination attempt last weekend, as industry analysts and supporters see his campaign progressively shifting its stance on crypto.