According to ChainCatcher news, as shown on the official account of the Yunnan Provincial People's Procuratorate, recently, the Shidian County Procuratorate prosecuted a case involving Li and 10 others for organizing and leading pyramid selling activities. After court hearings, Li and the other 10 defendants were sentenced to fixed-term imprisonment ranging from six years to two years for the crime of organizing and leading pyramid selling activities, and were fined between 500,000 and 100,000 RMB.Since May 2021, Li has successively gathered Huang, Jin, and others, using "blockchain" and "virtual currency" as a gimmick to seek illegal profits. They set up five capital pools on an online platform under the pretext of purchasing and holding virtual digital currency A and issuing virtual digital currencies B and C. Through a combination of offline meetings and online WeChat groups, they created a successful persona, leveraged special professional backgrounds, and promoted slogans such as "one coin, one mansion; one coin, one luxury car" and "earn hundreds of thousands to millions easily in a day," widely publicizing reward systems and profit prospects. They deceived the public into obtaining membership qualifications through purchasing, destroying, and adding to the capital pools, and completing assigned tasks to receive static dividends and dynamic earnings based on the number of people developed and investment amounts, forming five levels of rebates.According to the appraisal, the pyramid selling funds collected by Li and others through the online platform amounted to over 210 million RMB. The Shidian County Procuratorate reviewed the case and found that Li used virtual currency as a gimmick, colluding with the other nine defendants to defraud property through the online platform, disrupting the economic and social order. The total pyramid selling funds exceeded 210 million RMB, and the circumstances were serious. The actions of Li and the other ten violated the provisions of Article 224-1 of the Criminal Law of the People's Republic of China, constituting the crime of organizing and leading pyramid selling activities. After court hearings, the above judgment was made.

According to ChainCatcher news, as reported by Yunnan Legal Daily, in February 2023, seven defendants jointly discussed building an online platform for investing in virtual currency. After reaching an agreement, they contacted a company in Sichuan, where technicians developed the "3M platform" to issue the token "Mavro Coin," enticing investors to join the project with the promise of high profits from virtual currency investments. Once the platform was established and operational, the seven defendants actively promoted the investment platform's potential for high returns and conducted offline promotions to recruit subordinates, who in turn recruited others. According to the assessment, there were a total of 375 users whose subordinate levels were three or more (including three levels), and the total number of subordinates was 30 or more (including 30). The seven defendants profited between 4,300 yuan and 20,000 yuan.After hearing the case, the Xichou County People's Court found that the seven defendants used the "3M platform" to issue virtual currency, enticing investors to join the platform with the promise of high profits from virtual currency investments, and organized hierarchical structures in a certain order, developing personnel numbers as a means of profit. Their actions constituted the crime of organizing and leading pyramid selling activities. Based on the defendants' roles in the crime, the levels of development, their confessions and acceptance of punishment, and the return of embezzled funds, they were sentenced to fixed-term imprisonment ranging from two years and six months to one year and six months, with probation applied, and were fined.

ChainCatcher news reports that, according to Jimu News, the People's Procuratorate of Zhongxiang City, Hubei Province recently made a ruling on a major virtual currency pyramid scheme case. The main offenders Chen, Ding, and Fu were sentenced to three years in prison, with a five-year probation, and each fined 350,000 yuan for organizing and leading a pyramid scheme.In February 2022, the three main offenders developed and launched a virtual currency trading APP, using investment in virtual currency as a pretext to establish a pyramid scheme organization called "Certain Community." The organization extensively promoted through internet platforms and offline training sessions, enticing members to purchase virtual currency and recruit downlines. The organization was divided into five major battle zones and 16 vanguard groups, implementing strict hierarchical management.As of December 2022, when the case broke, the organization had developed over 10,000 member accounts, with the highest level reaching 17 tiers, involving an amount exceeding 57 million yuan. The three main offenders have voluntarily returned all illegal gains of over 22.59 million yuan. Prosecutors emphasized that virtual currency does not have the same legal status as legal tender, and related business activities are illegal financial activities that will be strictly prohibited. The public should remain vigilant against false promises of "guaranteed profits" and reject high-interest temptations like "recruiting others" to avoid falling into similar pyramid scheme traps.

ChainCatcher news, according to the Legal Daily, the Economic Crime Investigation Team of the Beijing Municipal Public Security Bureau has publicly reported that recently, the police dismantled a gang that organized and led pyramid selling activities under the guise of investing in virtual collectibles. The case involves over a hundred participants in the pyramid scheme, with an amount involved exceeding 2.8 million USD. The police remind that any activity that requires payment of an "entry fee" under the guise of investment, encourages recruitment of new members, and uses the number of people developed as a basis for compensation is a disguise for pyramid schemes. The general public should recognize the essence of pyramid schemes and enhance their awareness of prevention.According to police investigations, the pyramid scheme organization introduced "game rules" to the public through on-site lectures and WeChat group messages, attracting unspecified individuals to recharge and purchase under the pretext of investing in virtual collectibles, thereby earning profits and causing financial losses to many. Through the analysis and connection of police reports across the city, the police believe that this investment project is suspected of organizing and leading pyramid selling activities.Upon investigation, it was found that the organization had a complete member registration rule, and its profit-sharing model was divided into dynamic and static types. After participants recharge, they settle using virtual currency to obtain "static dividends." In addition, members can also obtain "dynamic dividends" by developing downlines, i.e., through the "recruitment" method.The police remind that some criminals turn "digital collectibles" and "virtual currency" into their own "wealth codes," using the concept and technology of the digital economy as a disguise to engage in illegal fundraising and other criminal activities. They attract investments and defraud money by boasting, exaggerating their value, or creating worthless "pseudo-coins." The general public should remain vigilant in their daily lives and avoid falling victim to scams.

ChainCatcher message: According to reports from CCTV News, the major economic crime suspect Zhang XX, who is suspected of organizing and leading pyramid scheme activities, has been successfully extradited back to the country from Thailand.It is understood that since 2012, the MBI group, led by the suspect Zhang XX, has been engaging in illegal pyramid scheme activities by issuing virtual digital currencies. They required participants to pay fees ranging from 700 to 245,000 RMB to obtain platform membership, using high returns as bait and counting the number of members and the amount of funds invested as a basis for compensation or rebates. The group has developed over ten million members, with involved funds exceeding 100 billion RMB.

ChainCatcher news, the People's Court of Xingyi City, Guizhou Province, publicly tried a case of organizing and leading pyramid schemes. The defendant, Qin, used the pretext of "mining" with virtual currency to lure more than 70 people into participating in the pyramid scheme, with the involved funds exceeding tens of millions.It is reported that the company launched a short-term rental computing power hosting business, claiming to rent "computing power" to customers as bait for high investment returns, enticing participants to continue recruiting friends and family for investment. Based on the facts established during the trial and the circumstances of sentencing, the court sentenced the defendant Qin to 2 years and 6 months in prison for organizing and leading pyramid schemes.

ChainCatcher news, the Supreme People's Court and the State Administration for Market Regulation jointly released 5 typical cases of punishing online pyramid scheme crimes according to the law, including cases of falsely promising high returns through investment in "virtual currency." The basic facts of the case are as follows:In early 2018, the defendant Chen and others used blockchain as a gimmick to plan and establish the "Certain Token" online platform to carry out pyramid scheme activities. They required participants to obtain membership accounts on the platform through referrals from their uplines and pay a threshold fee of over 500 US dollars in virtual currency to receive value-added services. Participants could use the platform's "smart dog brick-moving" technology to conduct arbitrage trading in different trading venues and earn platform profits.To evade crackdown, Chen and others moved the platform's customer service and currency distribution groups abroad in January 2019 and continued to carry out pyramid scheme activities using the "Certain Token" online platform. Statistics show that the "Certain Token" online platform registered over 2.6 million member accounts, with levels reaching 3,293 layers, and collected over 9 million pieces of various virtual currencies such as Bitcoin, Tether, and Grapefruit Coin from members.The People's Court of Yancheng Economic and Technological Development Zone in Jiangsu Province sentenced Chen to eleven years in prison for organizing and leading pyramid scheme activities, and imposed a fine of 6 million yuan; the other defendants were sentenced to prison terms ranging from eight years and eight months to two years, and fines were also imposed. The illegal gains were confiscated and turned over to the national treasury. After the first-instance verdict, Chen and others appealed. The Intermediate People's Court of Yancheng City in Jiangsu Province ruled to dismiss the appeal and upheld the original judgment.The People's Court imposed corresponding penalties based on the position and role of the organizers and leaders of the cross-border online pyramid scheme activities in the entire criminal chain, and legally confiscated the involved virtual currencies such as Bitcoin, cutting off the defendants' economic ability to commit cross-border crimes again, demonstrating the judicial authority's firm stance in safeguarding internet financial security and maintaining the stable and healthy development of the financial market order.

ChainCatcher news, according to a report by The Paper, the People's Court of Chongqing Liangjiang New Area (Free Trade Zone) recently concluded a highly publicized entrusted contract dispute case, which involves a dispute over members of a pyramid scheme organization purchasing virtual currency. The plaintiff, Qin, entrusted the defendant, Zhou, to register as a member on the pyramid scheme organization's online platform and purchase virtual currency, with a total investment of 223,500 yuan. Later, the online platform of the pyramid scheme organization suddenly shut down, making transactions impossible. After hearing the case, the court determined that the entrusted contract violated mandatory provisions of national laws and administrative regulations and should be deemed invalid. Based on the degree of fault of both parties, the court ruled that the defendant Zhou should return 106,700 yuan to the plaintiff Qin. After the first-instance verdict, Zhou was dissatisfied and appealed. The Chongqing First Intermediate People's Court made a second-instance ruling, rejecting the appeal and upholding the original judgment. Currently, this judgment has taken effect and has been automatically executed.

ChainCatcher news, according to Anhui Daily, the Anhui Provincial Political and Legal Affairs Committee, the Provincial Market Supervision Administration, and the Provincial Public Security Department jointly issued a notice. From May 13 to December 10, a province-wide crackdown on pyramid schemes called "Anhui Sword - 2024" will be launched, focusing on investigating network pyramid schemes that operate under the banners of "blockchain," "metaverse," "digital asset trading," and engage in activities such as virtual currency, mining machines, blockchain, and forex trading.

ChainCatcher news, November 2023, the Economic Investigation Team of the Kunming Public Security Bureau successfully cracked a new type of online pyramid scheme crime using virtual currency and blockchain concepts as a vehicle. Since 2022, individuals including Li have established a community on a public blockchain on the internet, using the bait of "earning static mining income through stakable virtual currencies" and "developing downlines to stake virtual currencies for substantial dynamic referral income," claiming that every level of players can receive management rewards of 2% to 30% from direct referrals. As of April 2023, their group had developed over 10,000 members, formed a hierarchical criminal organization with 15 levels, and involved funds exceeding 280 million yuan. Currently, 15 criminal suspects have been arrested in this case, 8 have been approved for arrest, and 11 have been transferred for prosecution.

ChainCatcher News: The Beijing Fengtai police have cracked a virtual currency pyramid scheme case. The public security department found that the complainant was actually the suspect.It is reported that the suspect, Xie, joined an organization called "Hua's Association" through a friend's introduction and invested by purchasing virtual currency. After making a profit from a small initial investment, he continued to invest 2 million yuan of his family's savings but did not receive any returns. After being trapped, Xie began to "recruit people" as required by the pyramid scheme, earning commissions and dynamic dividends at different levels, making him a key member of the pyramid scheme in Beijing, developing 9 levels of downlines and involving over 300 people. As the investment platform collapsed, Xie chose to report to the police when faced with debt collection from downline investors.

ChainCatcher news, according to the Chifeng Public Security WeChat account, the Economic Investigation Team of the Public Security Bureau of Yuanbao District, Chifeng City, Inner Mongolia, successfully persuaded two economic crime suspects who had fled to surrender. It is reported that in November 2022, the Public Security Bureau of Yuanbao District received a report from the public stating that they had downloaded and used a virtual currency platform in a WeChat group and were defrauded of 5,600 yuan on that platform. After receiving the report, the police conducted a preliminary analysis and believed that the platform was suspected of using virtual currency to engage in pyramid scheme activities. Investigation revealed that this virtual currency platform was based in Beijing, had a nationwide reach, a tightly organized structure, and novel criminal methods. By the time the case occurred, the total number of registered members on the platform had exceeded 18,000, involving 13 provinces and cities, with a transaction volume exceeding 2 billion yuan.In May 2023, after careful planning, the bureau organized over a hundred police officers to carry out a synchronized crackdown in cooperation with police in Beijing, Shanghai, Chengdu, and other locations, resulting in the arrest of 30 suspects, the seizure and freezing of virtual currencies worth approximately 10 million yuan involved in the case, and the confiscation of several tools used in the crime. With strong support and assistance from the Economic Investigation General Team of the Public Security Department and the Economic Investigation Detachment of the Municipal Bureau, the Economic Investigation Team of the bureau successfully persuaded two economic crime suspects who had fled to surrender. Currently, the related cases are under further investigation.

ChainCatcher news, according to the Legal Daily, the Public Security Bureau of Hechi City, Guangxi, has cracked a pyramid scheme case involving a live-streaming e-commerce APP related to virtual currency. The suspects used an APP called "Dimension" to create groups and conduct live-streaming sales, establishing a pyramid scheme model that involved recruiting new members and offering online registration rebates. They promoted virtual services through the app's in-app purchase function and distributed rewards called "Dimension Coins" set by the platform. Meanwhile, they continuously touted electronic commerce, virtual currency, and national-level projects in their promotions to cover up the essence of profiting through recruiting downlines.It is reported that in mid-November 2023, after meticulous police deployment, this new type of online pyramid scheme case involving over 300 million yuan and up to 3.5 million members was successfully cracked. As of last month, 13 suspects have been arrested, including 7 detained, 5 released on bail, and 1 transferred for handling. The case is currently in the process of further improving relevant evidence materials and undergoing trial transfer.

ChainCatcher news, according to the Procuratorial Daily report, the Xichuan County Procuratorate in Henan Province recently handled a virtual currency pyramid scheme case involving an amount of 120 million yuan. The suspect Wang entrusted a high-tech company to customize software, set up the "Red Bull Decentralized Exchange" website, and publicly issued "NB Coin (Bull Coin)" online, developing a corresponding Red Bull trading app to carry out pyramid scheme activities under the guise of "virtual currency" and "blockchain," and established the "Red Bull Business School Lecturer Group" for offline promotion and publicity. In just one year, the involved gang developed 2,128 members and defrauded over 120 million yuan in property.According to the identification by the judicial appraisal agency, the "Red Bull Decentralized Exchange" user hierarchy information totaled 1,322,474 entries, with users recharging virtual currencies such as USDT and BTC, among which the amount of USDT was 2,0181,988.4840085 (valued at approximately 120 million yuan). On July 14 of this year, the Nanyang Intermediate Court revoked the first-instance judgment against Wang, sentencing him to five years and nine months in prison for organizing and leading pyramid scheme activities, and imposing a fine of 500,000 yuan.

ChainCatcher news, according to the Liaocheng Public Security WeChat account, the Public Security Bureau of Shenxian County, Liaocheng City, Shandong Province, has successfully cracked the city's first case of pyramid schemes involving virtual currency, "12·04". Six leaders and key members of the pyramid scheme were arrested, and over 10 million yuan in illegal gains was recovered.In December 2022, police from the Shenxian Public Security Bureau discovered virtual currency pyramid scheme activities on the Binance Smart Chain during an online patrol. The project used the "token pocket" wallet and smart contracts to issue decentralized cryptocurrencies DCS and CAR, enticing participants with high returns to inflate the prices of DCS and CAR, and recruit new members, suspected of being involved in pyramid scheme activities. The special task force had previously set up a forward command center in Qingdao and received assistance from public security agencies in Tai'an, Weifang, Xi'an, Fuzhou, and other locations.

ChainCatcher news, according to the Beijing News, the core members of the blockchain project development and operation team are suspected of organizing and leading a pyramid scheme. The case was publicly heard yesterday at the People's Court of Xishan District, Wuxi City, Jiangsu Province. At the end of 2018, defendants Liang, Wang, Chen, and others formed a startup team and developed a public blockchain based on blockchain technology. On June 18, 2019, to showcase the performance of the public chain and attract users to understand and use it, Liang's team established the HUBDEX exchange on the public chain.On June 18, 2020, defendants Liang, Wang, Chen, and others set up a customer invitation system to determine the hierarchy of upper and lower lines, allowing for unlimited levels of development in each line. The HUBDEX exchange stipulated that after lower-level customers pledged HUB coins (the exchange's token), the exchange would provide rebates to upper-level customers based on dynamic income and other reward methods, directly or indirectly using the number of personnel developed and the amount purchased as the basis for rebates.The prosecution accused Liang and others of using high rebates as bait to obtain dynamic income and other benefits without any actual business activities, by developing lower-level members. Several defendants strengthened the management of personnel and trained lecturers for external promotion through the establishment of online communities and offline promotional meetings, attracting investors to participate. By the time of the incident, over 50,000 accounts had been registered on the platform, with more than 100 levels, involving a total amount of over 239 million yuan.The charges against the defendants in this case have changed multiple times. On February 26, 2021, when the case occurred, the Wuxi Public Security Bureau filed a case for illegal use of information networks; on August 6, 2021, suspects were arrested on suspicion of organizing and leading a pyramid scheme; on May 20, 2022, the Xishan District Procuratorate of Wuxi filed a public prosecution for illegal absorption of public deposits and organizing and leading a pyramid scheme; on March 22, 2023, the prosecution changed the charge to organizing and leading a pyramid scheme. The case is still under trial. (source link)

ChainCatcher news, recently, the Xianshankou Branch of the Public Security Bureau of Pingxiang City, Jiangxi Province successfully dismantled a network pyramid scheme criminal gang that used blockchain technology to issue "USEA coins" and "TVL coins". Three main suspects were arrested, 1.42 million "Tether" coins involved in the case were seized, along with 2 computers, 12 mobile phones, and 30 bank cards, with the amount involved exceeding 10 million yuan.In May of this year, police officers from the branch discovered during their work that the local community's participation in the "Huanya International Tourism" project was suspected of organizing and leading network pyramid scheme crimes. This gang used blockchain technology to develop "TVL" coins and issue "USEA" virtual currency, using social networking platforms such as WeChat and QQ as a medium, adopting a "referral" method to recruit members. They lured members to invest by selling virtual currency and offering economic benefits such as commission rebates and dividends, inciting and inducing members to develop multiple levels of downlines. Over a period of more than three months, they developed downline members to 4 levels, totaling over 3,000 people.Currently, the three suspects have been subjected to criminal coercive measures in accordance with the law, and the case is still under further investigation. (source link)