Why did the Yancheng police crack down on the "coin/currency circle" after arresting PlusToken and then Gigabit Miner? (In-depth)

Yancheng police are making the trading and currency circles tremble with fear. According to public information statistics, the total amount of suspected virtual currency pyramid schemes cracked down by Yancheng police has exceeded 50 billion.

On July 16, a notice was circulated on the Internet. The Yannan High-tech Zone Branch of the Yancheng Public Security Bureau notified Lei Taiguo's family that Lei Taiguo, who was suspected of organizing and leading a pyramid scheme, had been placed under residential surveillance at a designated location at 6 a.m. on July 2.

Lei Taiguo is from Anhui and does not usually move around in Yancheng. It is suspected that someone in the local area reported the case to the police for rights protection, which led to this result. He has three major businesses, namely the cloud computing power sales platform Jibit, the currency LTG (Latiaoge, which is also the three initials of Lei Taiguo's name), and the exchange CHANGE COIN. Lei Taiguo did buy a large number of mining machines to build a mining farm, but he went further and further on the road of capital disk.

Going back further, on July 2, the "investigation" of Zhao Dong, a big OTC tycoon in the cryptocurrency circle, attracted widespread attention. At noon on the 2nd, a rumor was widely circulated in the cryptocurrency circle, saying that he was taken away by the Yancheng police at around 10:40 in the morning. But later, Wu said that the blockchain confirmed that Zhao Dong was assisting the Hangzhou Municipal Bureau in the investigation. The Yancheng incident was false information. But this also indirectly shows the degree of fear of Yancheng in the cryptocurrency circle.

The most famous battle of the Yancheng police was the crackdown of PLUSTOKEN, the world's largest virtual currency fund, in 2019. PLUSTOKEN was a Ponzi scheme that attracted investors by arbitrage, involving more than 3 billion US dollars. The symbolic significance of this case is that the Chinese police arrested pyramid scheme criminals hiding abroad, which was rare in the past.

The Yancheng Public Security Bureau said that in early 2019, the Yancheng Public Security Bureau received a report that someone used the PLUSTOKEN online platform to engage in pyramid schemes, and the Yancheng Public Security Bureau filed a case against the suspects involved. On June 27, the public security organs carried out overseas law enforcement cooperation, and Vanuatu law enforcement departments arrested several Chinese suspected of crimes, including suspects who used the PLUSTOKEN online platform to engage in pyramid schemes. Vanuatu has transferred the suspects to China. The relevant personnel used the PLUSTOKEN platform to engage in pyramid schemes under the banner of blockchain digital currency wallets, and are suspected of organizing and leading pyramid schemes.

On the evening of August 16, the People's Procuratorate Case Information Disclosure Network announced that the Yancheng Development Zone Procuratorate approved the arrest of Chen Bo and six others who were suspected of organizing and leading pyramid schemes. They were suspected to be related persons in charge of PLUSTOKEN.

In addition, recent cases involving virtual currency pyramid schemes such as DGC coin, wotoken, and Yataifang have also been sentenced or heard in Yancheng. Among them, the funds involved in the "WoToken" platform reached more than 7 billion yuan; the amount involved in the DGC coin case was more than 5 billion yuan; and the amount involved in the Yataifang case reached 814 million yuan.

A lawyer familiar with Yancheng told Wu Blockchain that, first of all, Yancheng itself has a relatively large number of traditional pyramid schemes and even pyramid schemes. In 2018, an article titled "The 10-billion-dollar health empire Quanjian and the Chinese families under its shadow" on Dingxiangyuan went viral. Later, Quanjian's boss Shu Yuhui, who was sentenced to nine years in prison for organizing and leading pyramid schemes, was from Yubei Village, Xinfeng Town, Dafeng District, Yancheng City.

Secondly, virtual currency-related pyramid schemes and Ponzi schemes are quite popular in Yancheng, so there are indeed many local victims; finally, due to the first two, and as the police in developed areas, they have relatively rich experience in handling related cases and strong capabilities, especially in solving the PLUSTOKEN case.