The Town That Went Crazy for Crypto

At a backyard barbecue in San Pedro, Argentina, last May, Rafael Flaiman spotted a friend wearing a light blue blazer that looked a little too snazzy for the occasion. He needled the guy a bit. What’s with the jacket? Mr. Flaiman asked.

“La China pays,” the friend replied, with a triumphant smile.

La China? Mr. Flaiman grew up in San Pedro, a struggling riverside town of 70,000, and for 16 years he’s been a reporter at La Opinión, the local newspaper. But he’d never heard of someone named La China — Spanish for the Chinese woman — and had no idea why she’d bought a nifty new blazer for his buddy. A handful of the 20 people at the barbecue, it turned out, knew all about this mysterious figure and were eager to explain the singular way she’d earned them money.

Every weeknight at about 9 p.m., they said, La China turned up on the Telegram channel of a crypto currency exchange called RainbowEx. There, she texted instructions to buy some type of crypto — invariably an obscure and thinly traded one, known in the industry as a memecoin — at a particular price. The same message said to sell the coin when it reached a certain, higher price, which it always did soon after.

It was as steady as a clock. Everyone on RainbowEx bought the coin, the value of the coin rose, everyone sold. Up ticked the balance in their RainbowEx accounts.

Nobody knew who La China was, where she was or whether she even existed. She was just a photograph of a young Asian woman on RainbowEx’s Telegram channel. The guy with the new blazer took out his phone and showed Mr. Flaiman photos of La China-enabled purchases by locals. A car, a motorbike, a television. Some people were renovating their homes.