Authorities in China have shut down yet another blockchain pyramid scheme - this time worth over $46.8 million (RMB 300m).
According to the report on China Money Network, police arrested more than ten suspects in Jinan, in eastern China’s Shangdong province.
Setting up an e-commerce platform in 2017 that posed as a blockchain P2P platform, suspects allegedly told prospective members that paying different levels of membership would result in different share and dividend returns - as part of a five-tiered membership hierarchy.
The gang - reportedly made up largely of university students - sought to capitalise upon the enthusiasm surrounding blockchain and cryptocurrency in China.
Using industry buzzwords such as "Western Development", "One Belt and One Road" and "Poverty Alleviation,” the fraudulent company also claimed to be a “big data” company with huge growth potential and so conned unsuspecting victims out of hundreds of millions of RMB.
This latest pyramid scheme is just one of many that has exploited the hyper-enthusiastic atmosphere in the Asian cryptocurrency industry in recent months.
Just two weeks ago, authorites arrested 119 suspects alleged to have swindled over $2.3bn in China’s largest crypto pyramid scheme, while last month police arrested 9 in another $13 million pyramid scheme that started in late 2017.
With such a frenetic atmosphere gripping the cryptocurrency scene in China, the Chinese government has recently attempted to restore some semblance of control - publishing a study identifying 421 fake cryptocurrencies, as well as offering guidance on crypto red flags for prospective investors.