Lyu Yongshuang, a Chinese mining entrepreneur who once commanded approximately 9% of the global Bitcoin hashrate through her mining pools 1THash and Bytepool, became the victim of an elaborate investment fraud in the United States that cost her over $9.4 million. The scam, orchestrated by two American brothers posing as Middle Eastern royalty and a hedge fund manager, highlights the vulnerabilities faced by major industry figures when relocating operations overseas.

Who Was the "Crypto Mining Queen" and How Did She Build Her Empire?

Born in Ningbo in the 1980s, Lyu Yongshuang initially had no connection to finance or technology. She worked in international trade and later launched a custom tour group business, spending more than half of each year traveling before discovering Bitcoin in 2013. She quickly pivoted into cryptocurrency mining during its early stages in China, when miners sought cheap hydropower resources in Southwest China's mountainous regions.

In 2016, Lyu began formally building her own mining farm. Between 2017 and 2018, she transitioned to mining machine distribution. In July 2019, she established Chengdu Valarhash Technology Co., Ltd., serving as CEO and integrating the business into a comprehensive platform encompassing mining pool operation, mining farm construction, mining machine hosting, and hashrate trading. The company officially introduced the 1THash and Bytepool mining pool brands in December 2019.

At its peak in the first half of 2020, 1THash ranked 7th globally among Bitcoin mining pools, and Bytepool ranked 11th. Together, the two pools controlled approximately 9% of the global Bitcoin hashrate, meaning that for every 100 bitcoins generated globally, about 9 went to her pools. This was a staggering figure at the time, establishing Lyu as one of the most influential figures in the mining industry.

What Forced Lyu to Relocate Her Mining Operations Overseas?

On May 21, 2021, China's State Council Financial Stability and Development Committee explicitly proposed to "crack down on Bitcoin mining and trading behavior." In mid-June, the Sichuan Provincial Development and Reform Commission and the Sichuan Provincial Energy Bureau jointly issued a notice requiring power generation enterprises to immediately stop electricity supply to virtual currency mining companies.

This was devastating for Lyu. Sichuan was the largest mining hub in China, with wet season hydropower prices as low as 0.2 to 0.3 RMB per kilowatt-hour, making it one of the cheapest power resources globally. Lyu later told friends that it was a period of "extreme anxiety." Her company had nine data centers distributed across China, the US, Canada, Russia, Sweden, and other locations, but the major domestic mining farms were the core source of hashrate. "Overnight, thousands of mining machines were forced to shut down, hundreds of shipping containers waited to be transported out, and money was burning every single day," she recalled.

She ultimately chose the United States as her first stop for venturing overseas. However, when she traveled across the ocean with hundreds of containers of mining machines to find a new foothold in Ohio, what awaited her was an elaborately orchestrated scam.

How Did the Fraud Scheme Unfold?

In July 2021, through an intermediary, Lyu met Zubair Al Zubair, a man who claimed to be a "UAE royal son-in-law" and asserted control over Middle Eastern family funds and US local government resources. Zubair recommended an industrial property located in East Cleveland, Ohio, known as the Nela Park campus, claiming it could provide electricity at a low price of $0.04 per kilowatt-hour.

On August 11, 2021, inside the East Cleveland City Hall in Ohio, a seemingly formal signing ceremony took place. Witnessed by then-Mayor Brandon King and other municipal officials, Lyu signed a cryptocurrency mining farm development contract. She paid $3 million to Zubair's company, "Dubai Bridge," and wired an initial $1 million from a Hong Kong account.

However, this was just the beginning of an elaborately planned fraud. In reality, Zubair and his brother Muzammil were native-born Americans with no relation to any Middle Eastern royalty. The elder brother's claim of being a "son-in-law" was entirely fabricated; the younger brother's so-called "hedge fund manager" title was "self-taught" by watching YouTube videos and the TV series "Billions".

Steps Fraudsters Used to Manipulate a Major Mining Executive

• Identity Fabrication: The brothers created false personas as Middle Eastern royalty and a hedge fund manager, leveraging cultural and financial authority to establish credibility with Lyu.
• Local Government Influence: They successfully contacted and influenced Michael Smedley, the Chief of Staff to the Mayor of East Cleveland, Ohio, to participate in the signing ceremony and lend legitimacy to the scheme.
• Personal Relationship Exploitation: During subsequent interactions, Zubair and Lyu established a "close personal relationship" that Lyu viewed as romantic in nature; prosecutors later pointed out that such personal relationships were part of Zubair's fraud pattern, aimed at reducing the likelihood of victims questioning his claims.
• Attractive Financial Terms: The brothers offered electricity at $0.04 per kilowatt-hour, significantly lower than typical US rates, making the opportunity appear too good to pass up for a mining operator facing rising costs.
• Formal Documentation: The scam included a seemingly legitimate mining farm development contract signed in front of municipal officials, creating the appearance of an official, government-sanctioned transaction.

The scam ultimately cost Lyu Yongshuang over $9.4 million, including contract payments and the theft and resale of 1,067 mining rigs. In 2026, the brothers received lengthy prison sentences for their crimes.

Concurrently, Lyu faced legal battles in China, where a court invalidated a mining contract with a listed company, ordering a refund of nearly $2.8 million. These events marked a severe downturn for the once-powerful industry figure who had built one of the world's largest mining operations.

The case underscores the risks faced by major cryptocurrency mining operators when relocating operations to new jurisdictions, particularly when dealing with unfamiliar regulatory environments and potential bad actors who exploit the industry's rapid growth and the substantial capital involved in mining infrastructure.