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: 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, the People's Procuratorate of Danju District, Zhenjiang City, Jiangsu Province recently prosecuted the suspect of the "moomworld" project. The court sentenced Chen to three years in prison for organizing and leading pyramid scheme activities, and imposed a fine of 500,000 yuan.According to the investigation by the public security organs, around June 2020, Chen, along with Chen A, Tang, Lai, and Yu (all handled in separate cases), developed the "moomworld" project in Malaysia, promoting MT and SGB virtual currencies through an online platform, and engaged in illegal pyramid scheme activities by recruiting members and expanding the downline. By the time of the incident, the platform had accumulated over 100,000 registered members, with levels reaching 1,173, and members had recharged 13,189,726.171886 USDT, equivalent to 83,886,658.45 yuan. (source link)