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Chinese law enforcement officers have exposed a crypto giant: the end of the game for a $280 million pyramid
Chinese police have exposed a large-scale cryptocurrency pyramid scheme
The police of the city of Chifeng, located in the Chinese province of Inner Mongolia, have released data on a significant cryptocurrency scam. An organized criminal group led a fraudulent scheme that attracted investments worth about $280 million.
Although the exact name of the cryptocurrency platform is not mentioned due to the secrecy of the investigation, it is known that its main offices were located in Beijing. It is reported that this organization was well structured and actively used advanced marketing strategies to attract investors.
According to the police, over 18,000 participants from 13 different provinces were registered on the site, while the total transactions with cryptocurrencies exceeded 2 billion yuan (approximately $280 million). During the operation, 30 people were detained, allegedly involved in the scheme, and assets worth almost 10 million yuan (about $1.4 million) were frozen. Two more persons turned themselves in to law enforcement agencies on their own.
Despite the fact that cryptocurrency trading and mining is strictly regulated and even prohibited in China, interest in virtual assets remains high. Residents of the country find workarounds to access cryptoplatforms using, for example, VPN services. According to reports, Chinese investors have become more active in the cryptocurrency market, partly due to the falling profitability of the national stock market.
The context of the crisis is complemented by the decision of the Chinese Supreme Court in 2022, which declared illegal the collection of funds in digital currencies. According to the court's ruling, such financial transactions amount to fraud, which is evidence of the government's tough stance on cryptocurrencies and related digital transactions.
