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Chinese cryptocurrency mining firm charged with running pyramid scheme, as Beijing maintains tight grip on virtual assets
- Four executives at Filecoin mining firm Shenzhen Shikongyun Technology were slapped with criminal charges in Guangxi for running a pyramid scheme
- Enticed with high returns, nearly 100,000 people signed up with the firm’s scheme, which raked in more than US$83 million, local prosecutors said
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As Hong Kong steps up efforts to become a virtual-assets hub, mainland China remains steadfast in its crackdown on cryptocurrency-related activities, with local authorities recently prosecuting one of the country’s largest Filecoin miners for running a pyramid scheme.
Prosecutors in Pingnan country, in the southern autonomous region of Guangxi, have slapped four executives at Filecoin mining firm Shenzhen Shikongyun Technology with criminal charges that include organising and leading a pyramid scheme involving more than 600 million yuan (US$83 million).
Shikongyun had “exaggerated” the economic model and investment potential of the distributed storage technology for its Filecoin project, according to local prosecutors in a blog post published by Pingnan court after a recent hearing of the case.
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The firm allegedly signed up nearly 100,000 members on its platform from February 2021 to May last year, raking in 606.9 million yuan and nearly 32 million Tether (USDT) tokens – a stablecoin pegged in a 1:1 ratio with the US dollar – in the process.
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Is cryptocurrency too risky for China?
Is cryptocurrency too risky for China?
Prosecutors alleged that Shikongyun demanded members to either buy or lease its mining equipment. These members also received returns from developing new participants to the company’s scheme.
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