Chinese Court Trials Filecoin Mining Firm for Alleged Pyramid Scheme
A Chinese local court has begun the trial of Shenzhen Shikongyun Technology, a major Filecoin mining firm, and its four executives for an alleged $83.2 million pyramid scheme. The defendants are accused of deceiving customers by promising high returns through mining FIL coins. Here are the key points:
- The defendants lured participants into the scheme by requiring membership qualifications and fees for mining machine purchase or rental.
- They formed a hierarchical structure and used exaggerated profit predictions to attract investors.
- Prosecutors claim the defendants disturbed economic and social order by enticing further participation and deceiving individuals to gain assets.
- The company obtained over $83 million and millions of coins through their platforms.
- Mainland China banned all crypto transactions in September 2021 but is actively working on developing its central bank digital currency (CBDC).
Hot Take: The trial of Shenzhen Shikongyun Technology highlights the ongoing crackdown on fraudulent activities in the crypto industry in China. While the country has banned crypto transactions, it remains focused on developing its own digital currency. This case serves as a reminder to investors to exercise caution and conduct thorough due diligence before engaging in any crypto-related activities.
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