Chinese law enforcement agencies announced the capture of the organizers of a fraudulent scheme that lured investors with the “fastest blockchain”.
This is the first online cryptocurrency pyramid in Shanghai, according to local publication Baijiahao. The investigation of the fraudsters was conducted by the Shanghai police, involving colleagues in Beijing, Hainan, Shaanxi, Sichuan and other cities of China. The investigation has been going on for over six months.
According to the Chinese police, about a dozen local residents were the organizers of the fraudulent scheme. In 2020, they launched an investment platform and raised over 100 million yuan ($15 million). At the same time, the platform stated that the company is developing “the fastest blockchain in the world” and is a “billion-dollar application corporation.”
The scheme of the pyramid was quite simple – after registering on the platform, the user bought at least 1,000 “own tokens” of the platform and began to receive “passive income” from them. However, the main income was from attracting new users – there was a developed referral system. In total, more than 60,000 users have been registered on the platform, and the maximum number of referral levels has reached 72.
According to the laws of the People’s Republic of China, the organizers of such pyramid schemes involving more than 30 people and more than three levels are subject to criminal liability.
Earlier, US law enforcement agencies charged four suspects with creating the JetCoin cryptocurrency pyramid and defrauding investors for a total of $44 million.
Source: Bits
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