Chinese law enforcement authorities have opened a multimillion-dollar financial pyramid, which was another blockchain project, trying to cash in on the hype surrounding technology.
Police in Jinan, the capital of the Chinese province of Shandong have arrested a group of ten suspects involved in the organization of the pyramid, reports China Money Network. Defendants have created in 2017 unnamed site e-Commerce, disguised as a P2P blockchain-a platform to defraud vulnerable investors indiscriminately invest in any project with the word «blockchain».
The creators of the scheme used to attract investors the words on everyone’s lips, thanks to the efforts of the Chinese government and media, which lately is not rarely say
about technology. Representatives of the scheme have stated that their company works with «bacchanal» and «big data», and has a huge potential for growth.
They also argued that the development of the company attended the «Western developers» and that the company aims to «fight poverty». Fraudsters even claimed a part in the project «One belt and one road» economic initiative of the PRC, involving the Union of «Economic belt of the silk road and Maritime silk road of XXI century».
After launching the online platform the authors of the scheme have created a five-level hierarchy modeled on the basis of the discount system, in which the investment was extorted from new members in exchange for a discount on membership. Investing funds in different levels of membership, the scammers promised to investors appropriate return on shares and dividends from the profits of P2P blockchain.
Jinan police said that the majority of victims the offender is found among University students, whom they lured into the scheme, promising quick benefits.
This case was one of the last exposed Chinese law enforcement authorities of fraudulent schemes involving cryptocurrency or blockchain. Recently, the Chinese authorities stated that he found 421 fake cryptocurrency, the creators of which used «business model on the basis of the pyramid.»
In April, Chinese police in XI’an, capital of Shaanxi province in Central China, arrested the founders of the scheme DBTC, attended 13 000 users who have invested
in her more than $13 million. To advertise their scheme have attracted a citizen of Russia, to create the impression that this is an international project. In addition, they claimed that their coin gets listed on several exchanges, such as Shangya, U-Coin and ZB.com
In addition, recently in China have been arrested
the organizers of the «tea» Scam-project appropriated $47 million. The creators of the project assured that all of the coins they secured a rare breed Tibetan Puer tea, which they have in stock at the billions of dollars.
Last week a two-year investigation into large-scale scheme multi-level marketing Weika Coin (Chinese name OneCoin), ended with 120 arrests and 98 sentences. According to experts, the local organizers OneCoin earned about $2.3 billion. The investigation and subsequent disclosure scheme has become the largest event of its kind for the Chinese province of Hunan, where the investigation was conducted.
As of this month the number of membership levels in the Chinese scheme OneCoin has already reached 140, and the number of involved investors exceeded 2 million people. To date, the authorities managed to return from the pyramid of about $236 million.