- Dragon Coin raised some $400 million in 2017/18, claiming to be a gambling token
- One of the backers was a former triad leader known as Broken Tooth
- A Finnish investor was taken for $24 million, with a Thai film star’s family arrested as a result
Dragon Coin is one of the largest ICOs of all time, yet very few people have heard of it or remember it. Its $400 million raise is topped only by the likes of EOS and Telegram, yet it has somehow gone under the radar, despite its backstory involving a fake $300 million floating casino, a former Hong Kong triad leader called Broken Tooth, and one of Thailand’s most famous actors. It’s time you met, or remembered, Dragon Coin.
Dragon Coin Gets off to Roaring Start
Dragon Coin started making noise in early 2017, chiefly because of its ambition. Offered by Macau gaming company Dragon Corp., Dragon marketed itself as a casino-based token that would use blockchain technology to reduce the cost of high rolling casino junkets in Macau, as well as promising to build its own casino in Macau, and not just any casino – a $300 million floating casino called Dragon Pearl:
The ICO targeted a raise of $500 million for the project, canvassing potential seed investors for the initial fundraise in mid-2017. And it found them, picking up some $60 million of early investment, including $24 million from one man – Finnish millionaire Aarni Otava Saarimaa. Their initial funding secured, Dragon Corp immediately contracted Norwegian construction firm Brova Idea to start work on the casino, and everything looked promising.
Broken Tooth Makes an Entrance
The Dragon Coin whitepaper, produced for the ICO, talked of a gambling revolution, five-star facilities at its floating casino, and the project being a “beacon of success”. What it didn’t mention was that one of its backers was notorious gangland figure Wan Kuok-koi, known as ‘Broken Tooth’, a former leader of the 14K triad group in Hong Kong.
Then 61, Broken Tooth had recently finished a 14-year stint in prison for a litany of underworld crimes, and his involvement sparked a frenzy of both national and international interest, not to mention the interest of the authorities, who quickly denounced the ICO and warned anyone thinking of contributing that their money was not protected. This caused Saarimaa enough concern to report his investment to the authorities, stating that he had yet to see any return on it and he was now concerned over its security.
The Thai Crime Suppression Division (CSD) launched an investigation, assuming it was a straightforward case of fraud…until Saarimaa revealed that he had pain in Bitcoin. This immediately made the investigation “complicated” according to the CSD, with the agency taking months to work through the blockchain and traditional banking records to ascertain where Saarimaa’s money had gone.
The Wheels Come Off
During this time, Dragon Corp. was still free to run its ICO, which it did, receiving $320 million in March 2018. With other investment, this gave them a pool of $400 million with which to build the casino and create their cryptocurrency. HitBTC exchange announced that it would launch the DRG token in March 2018, and early investors prepared to reap their rewards, unaware that the CSD was investigating Dragon Coin.
The exchange launch was a disaster, with ICO investors watching their investment disintegrate before their eyes – the value started out 25% under ICO price and kept dropping, hitting $0.62 in less than a week, representing a 79% loss out of the gate. Following this disillusionment came the news that casino constructors Brova Idea had abandoned the casino project in November of the previous year due to repeated alterations to contracts and delayed payments.
With investors now massively out of pocket and no one making the casino, it was pretty clear to everyone that something fishy was going on. Thankfully the CSD had by now made some headway and in August 2018 made an arrest, although not one that anyone could see coming – Jiratpisit “Boom” Jaravijit, a famous Thai actor, was arrested after $649,000 of Saarimaa’s funds had ended up in his bank account, with the actor’s siblings, Prinya, Thanasit, and Supitcha also sought on money laundering charges.
CSD investigations had revealed that Saarimaa’s ₿5,500 contribution had been split between seven Bitcoin wallets, with some of the money used to buy land in Thailand and the rest cashed out via exchanges and sent to 51 different bank accounts:
Prinya Jaravijit, thought to have been the ringleader in the fraud against Saarimaa, was arrested at Thailand’s Suvarnabhumi airport en route from the United States in October 2019. He is set to stand trial for the scheme in 2020, alongside his entire family, including the parents.
Where Now for Dragon Coin?
With the floating casino plans now recognised as nothing more than a work of fiction, attention has turned to the remaining $320 million. It seems that this mammoth token raise may not have been fraudulent in itself, with the project still alive and focused on entertainment rather than casinos. The token price is still in the gutter, but if the project can sever its ties to its past and create a new identity then it may yet succeed.
Broken Tooth, who was never officially part of the Dragon Coin team, has now left and moved onto other projects. This leaves the Jaravijit family on the hook for the fraud, which they deny, and leaving the crypto world with yet another incredible swindle to try and wrap its head around.