Original Author: Nicky, Foresight News
Caixin published an article on June 11th titled "Female Crypto Boss Defrauded of 60 Million in the US: How Did the ‘Middle Eastern Royal’ Brothers Set the Trap?". Following the clues in the article, we investigated the remarkable story of this "female crypto boss," Lyu, within the crypto world.
According to Caixin, a domestic female crypto tycoon was the victim of an investment fraud in the United States, suffering losses exceeding $9.4 million (approximately 60 million RMB). This individual is Lyu, the CEO of a computing power technology company in Southwest China. At its peak, the mining pool under her company reportedly accounted for about 9% of the global Bitcoin network hashrate.
The report indicated that two brothers named Zubair, who claimed to have "Middle Eastern royal" backgrounds, carried out the fraud by forging identities. One claimed to be a "Middle Eastern royal son-in-law," asserting control over Middle Eastern family funds, international business connections, and US local government resources. The other impersonated a character from the TV series "Billions," presenting himself as a hedge fund manager. The pair also successfully contacted and influenced Michael Smedley, the Chief of Staff to the Mayor of East Cleveland, Ohio, ultimately inducing Lyu to sign a contract for developing a crypto mining farm.
The Lyu mentioned in the report is an 80s-born female entrepreneur named Lyu Yongshuang (Fiona Lyu). The Chengdu Valarhash Technology Co., Ltd. she founded operates two mining pools: 1THash and Bytepool.
According to Caixin, Lyu Yongshuang was born in Ningbo in the 1980s. Before entering the cryptocurrency industry, her career path had no connection to finance or technology. She initially worked in international trade and later started a custom tour group business. She is an avid enthusiast of outdoor travel, diving, and sailing. In a 2020 interview, she mentioned that from 2008 to 2018, she spent more than half of each year traveling, covering destinations all over the world.
According to a previous report by TokenInsight, she first encountered Bitcoin in 2013 and immediately plunged into this emerging industry. At that time, China's cryptocurrency mining was still in its early stages, and miners needed to venture deep into the mountainous regions of Southwest China in search of cheap hydropower resources. Lyu recalled being among the earliest groups to "find electricity" in Sichuan. "The conditions were tough back then, but the electricity was cheap, the returns were high, and everyone was very excited."
In 2016, she 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, integrating the business into a comprehensive platform encompassing mining pool operation, mining farm construction, mining machine hosting, and hashrate trading. In December of the same year, the company held a product launch event in Chengdu, officially introducing the 1THash and Bytepool mining pool brands and the 1TMine hashrate contract trading platform.
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. This was a staggering figure at the time, meaning that for every 100 Bitcoins generated globally, about 9 went to her pools.
A Sweeping Ban and a Turn of Fate
On May 21, 2021, the Financial Stability and Development Committee of the State Council held its 51st meeting, explicitly proposing 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 conduct self-inspection and self-correction, immediately stopping electricity supply to virtual currency "mining" companies. For miners in Sichuan, this was the most devastating blow. Sichuan was the largest mining hub in China, with wet season hydropower prices as low as 0.2-0.3 RMB per kilowatt-hour, making it one of the cheapest power resources globally.
According to Caixin, Lyu Yongshuang later told friends that it was a period of "extreme anxiety." Her company had nine data centers distributed in 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."
Image source: Caixin
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, USA, what awaited her was an elaborately orchestrated scam.
According to Caixin, in July 2021, through an intermediary, she met Zubair Al Zubair, a man who claimed to be an "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 Yongshuang signed her name on a cryptocurrency mining farm development contract, filled with hope. She paid $3 million to Zubair's company, "Dubai Bridge," and wired an initial $1 million from a Hong Kong account.
Image source: Caixin
However, this was just the beginning of an elaborately planned fraud. In reality, Zubair and his brother Muzamir 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."
During their subsequent interactions, Zubair and Lyu Yongshuang established a "close personal relationship." In Lyu's view, this relationship was 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.
The scam ultimately cost Lyu Yongshuang over $9.4 million (approximately 60 million RMB), including contract payments and later, 1,067 mining machines (sold for $6.17 million) that were defrauded by Zubair's brother and resold to Canada. That signing ceremony in the mayor's office was merely a false endorsement arranged by Zubair through bribing the mayor's chief of staff, Michael Smedley.
In May 2026, the US Department of Justice announced the sentences: Zubair was sentenced to 24 years in prison, Muzamir to 23 years, and Smedley to 8 years. Lyu Yongshuang appeared in the case under the code name "Victim 2."
Another Legal Battle Back Home
Around the same time Lyu Yongshuang was entangled in the US scam, she was also facing another legal dispute back in China, involving a lawsuit with Shanghai Jincai Network Technology Co., Ltd., a subsidiary of the A-share listed company ST Zhongchang (600242.SH).
Image source: Shanghai Securities News
According to previous reports by Economic Observer and Jiemian News, the trigger for the incident was ST Zhongchang's then-chairman, Li Qunnan. Between January and September 2021, Li was suspected of misappropriating listed company funds to purchase Bitcoin mining machines and pay related hosting fees, totaling over 53.5472 million RMB. Among these, the company spent 30 million RMB purchasing servers (Bitcoin mining machines) from Chengdu Valarhash. These purchases were disclosed in the 2021 interim report as "company fixed assets used for actual operations," but audits found the related funds did not substantively form assets on the company's books.
Against this backdrop, ST Zhongchang's new management, seeking to recover losses, sued Chengdu Valarhash in the name of Shanghai Jincai in April 2022. They demanded the termination of the "Computing Power Service Contract" signed between the two parties on April 1, 2021, and the return of the contract price of 19.2965 million RMB.
In October 2022, the Chengdu High-Tech Industrial Development Zone People's Court issued a first-instance judgment: the contract was invalid because it involved Bitcoin "mining" activities, and Chengdu Valarhash was ordered to refund 19.2965 million RMB within ten days. The company appealed, but the second-instance ruling upheld the original judgment.
This lawsuit, from filing to final judgment, unfolded almost concurrently with Lyu Yongshuang's ordeal of being defrauded in the US. On one side, 9.4 million USD was lost overseas; on the other, nearly 20 million RMB in contract payments was ordered to be refunded domestically. Under this double blow, the "Crypto Mining Queen" who once controlled 9% of the global Bitcoin hashrate faced the darkest moment of her life.
