Major Chinese Filecoin Miner Accused of Orchestrating $83.2 Million Pyramid Scheme

cryptonews.com:

A Chinese local court has started the trial in the case of Shenzhen Shikongyun (Space-Time Cloud) Technology, a major Filecoin mining firm, for an alleged $83.2 million pyramid scheme.

The ongoing trial in Pingnan County in the Guangxi autonomous region involves the company's four executives, including the founders.

The defendants allegedly lured customers into the scheme under the pretense of mining FIL coins. They then required participants to obtain membership qualifications by paying fees for mining machine purchase or rental.

Furthermore, members were required to form a hierarchical structure, get more people to participate, and use high returns as bait, among other violations.

Therefore, the prosecution said, the defendants used exaggerated profit predictions to attract investors, promising excessive returns for storage servers sold in a pyramid operation.

"With the lure of substantial returns, they enticed further participation and deceived individuals to gain assets, disturbing the economic and social order," the prosecutors were quoted as saying.

According to the report, Lai Mouhang and Lai Moujun established Shenzhen Shikongyun Technology in 2018. Defendants Liang Mousheng and Hu Mou joined soon after.

In September 2019, Lai Mouhang set up a community website with the domain name ipfs.cn and a WeChat public account, "vigorously promoting and exaggerating the investment prospects" of distributed storage technology and Filecoin's economic model, said the report. 

The defendants developed their filpool.io platform, using it to promote the company and "exaggerate the profit prospects of the technology."

In February 2021, they developed the partner platform bpool.io to further carry out multi-level marketing (MLM)