Guizhou Cyber Police in China Cracks Down on Illegal Activities Related to "Virtual Currency"

BlockBeats News, December 18, the Cyberspace Administration of the Ministry of Public Security of China released a case stating that the Guizhou Qiannan Cyberspace Security Bureau, in collaboration with the Economic Investigation Bureau, cracked a "virtual currency" online pyramid scheme case. The special task force was dispatched to multiple locations and successfully arrested 15 criminal suspects.

Upon investigation, the pyramid scheme organization propagated the slogan "Anything valuable in the world can be tokenized," established a virtual currency trading platform without real-name registration, set up various levels, and members participated in the pyramid scheme by recharging and pledging virtual currency. By developing downlines to receive direct referral rewards, they profited. It was a multi-level marketing organization with a hierarchy of three levels or more, involving thousands of participants.

The criminals established a certain virtual currency on the network, using the lure of high returns from purchasing the virtual currency. They intentionally drove up the price of the virtual currency. Based on the amount members purchased, they were assigned different "identity levels." As the levels increased, so did the returns, encouraging "old members" to continue recruiting "new members," attracting more participants to join the pyramid scheme and achieve a layered rebate system.