Authorities in China revealed the capture of ten individuals allegedly behind an online pyramid platform that has extracted millions of dollars from users. The suspects received accusations with promising high returns and a juicy income to seduce more victims and invite them to catch new users to the pyramidal scheme.
The report suggests that suspected fraudsters may have deceived unsuspecting investors with more than $15 million or 100 million yuan.
According to revelations in the report, the capture happened after an exhaustive investigation to unveil the illegal activities led by the network. The investigation began right after authorities reported the following digital currencies used to apply the pyramid scheme in Shanghai.
The Shanghai Public Security Bureau Economic Investigation Team highlighted that the pyramidal scheme perpetrators strengthened their deceiving strategies by stating that they brought value-added services for virtual currency investment. The scammers also explained to users that their project was a unicorn linked to other global applications.
At Least 60,000 Accounts got Created
However, after the investigation reached an end, Chinese police revealed that the online pyramid scheme, which got created in 2020, counted on overseas servers. According to the report, these servers got controlled by a prominent criminal individual known popularly as “Mou.” Through the false Blockchain technology promoter entity and promising fast evolution and regular payments, Mou and his team gained the possibility of attracting unaware investors.
Mou created an advertising and promotion team to seduce more users and make them pay membership fees to keep disguising the scam and make it more trusted.
This team would also set up social media chat groups that they would implement to make more users join the deceiving activity; personal treatment also played a vital role in the fraud. According to the report made by the authorities, the scammers managed to create more than 60,000 member accounts before falling into the authorities’ hands.
How the Scammers Conducted their Activities
According to Baidu, users first accomplished the platform login and registration through the online invitation code. After rising to around 1,000 platform tokens as an entry fee, they began to receive promotions promising that the victims could earn a significant piece of revenue.
However, the most prominent reward that members of the platform acquired was not the one promised. The victims only received the ones generated by the profits obtained by referring it to other users; these actions denote how a usual pyramidal scheme works.
According to the policies followed by the network, each time a new user enters as a current referred; the user receives direct rewards from the platform linked to a referral policy. If users continue to evolve inside the network, they will also acquire indirect rewards. Also, members inside the network could improve their membership status under the collected assets invested by customers.
By: Jenson Nuñez
