Beijing Handles First Blockchain Pyramid-Scheme Assistance Case; Involved Company Faced Fines and Confiscations Totaling Over RMB 930,000

TechFlow reported that, on October 29, according to the Beijing Daily app, the Haidian District Market Supervision Administration in Beijing investigated and handled the city's first illegal case involving the use of blockchain and virtual currency technology to assist pyramid-scheme activities. The technology company involved was subject to fines and confiscations totaling over RMB 930,000. The company was an outsourced service provider for a public blockchain, providing outsourced support such as operations, marketing services, promotion, exchange integration and maintenance.

The public blockchain launched the 'Atom Plan' and 'Hathor Plan', which centered on referral rebates based on the number of new members recruited. Participants had to invest funds to qualify for membership, and rebates were determined by recruitment volume. Despite being expected to know that pyramid-scheme applications existed on the public blockchain, the company continued to provide technical operations and maintenance, external promotion, and maintenance of virtual currency trading channels, facilitating the movement of pyramid-scheme funds and the spread of such activities. Currently, the public blockchain's pyramid-scheme activities have been investigated and handled by public security authorities, and all involved pyramid-scheme organizers have been placed under criminal detention.

Source: TechFlow