In 2018, a new MLM coin was created every two days on average!

The original intention of the blockchain was to create "trust" for human society. However, the reality is contrary to expectations. In 2018, the blockchain not only failed to achieve "trust", but also faced a greater crisis of "dishonesty". In addition to scandals such as "breaking the issue price", "losses", "layoffs" and "running away", another black swan has never been far away, that is, rampant pyramid schemes are disrupting the development order of the blockchain world like a cancer.

On the one hand, the bull market in the digital currency market at the end of 2017 gave rise to the myth of getting rich quickly, attracting thousands of outsiders to join the market. On the other hand, after traditional MLM masters put on the new "leather coat" of blockchain, they began to develop downlines more easily. Under the cover of blockchain, MLM plans are like riding a rocket.

Looking back on all this, it seems like a premeditated murder case of blockchain. Who is creating the disaster of blockchain in disguise?

In the New Year, they are on the road of defending their rights

"We were all scammed, worth hundreds of thousands of dollars." Several investors jointly reported to Bibi News that a digital currency project was suspected of being a pyramid scheme. One investor added, "The amount of money invested by investors ranged from a few thousand to several million, and the total investment is expected to reach tens of millions."

It is understood that they were all important members of this project, including business director, operations director and marketing director. Some claimed to be "very familiar with this project." However, most of them have already resigned. Wage arrears and fraudulent investment were the reasons why they were forced to leave.

According to people familiar with the matter, the distribution of this project is a pyramid scheme. Currently, the digital currency is distributed across the country. Those involved in the distribution are mainly peripheral teams, that is, young people who are scattered all over the country but are not aware of it. Different reward mechanisms are set up at each level.

Bibi News learned that there are indeed many suspicious aspects of the project. For example, the wallet has been launched before the main network is launched; it has not been listed on the exchange, but it is openly sold in multiple communities.

Judging from the current information, this project is not a normal digital currency game at all. Previously, they sought media exposure while taking legal action to appeal to the court.

It is understood that a certain media also reported that an investor was defrauded of 150,000 yuan when buying DFC. He only bought a small amount of coins when he first invested in the project, and then he started to buy a large amount after seeing its increase, but he did not expect that it would start to fall after a few days of increase.

After careful research, his friend discovered that the project had an obvious mechanism to pull users offline, but he did not take it seriously until the official website could not be opened and his account became a string of numbers. He then realized that he had been cheated and is now seeking media and legal means to protect his rights.

On the Bit110 digital currency rights protection website, new rights protection information is updated every day. In December alone, the number of items on the list of suspected runaways reached 56, and most of these projects involved Ponzi schemes and recruiting people.

At present, the blockchain media group and operation group can be described as "deserted". On the contrary, the rights protection group of digital currency is developing vigorously, and many official groups of project parties have even evolved into rights protection groups. It is understood that in early November, after Yang Ning's CDC team was exposed and disbanded, the CDC project group of 100 people suddenly had thousands of rights protection information.

Rights protection has become the underlying tone of blockchain in 2018.

In 2018, blockchain may become a hard-hit area for pyramid schemes

It is understood that at the beginning of this year alone, there were more than 3,000 MLM platforms in China that used the concept of blockchain. In 2018, blockchain may become a disaster area for MLM.

Bibi News learned from the China Judgment Documents Network that in 2018 alone, there were as many as 193 virtual currency pyramid scheme cases. If the year option is omitted, the number of judgments on virtual currency pyramid scheme cases reaches 399.

China Judgment Documents Network

What is MLM currency? Simply put, it is the application of technical concepts such as digital currency and blockchain, combined with traditional MLM methods, to conduct illegal fundraising criminal activities in the name of virtual digital currency investment.

Why can digital currency and MLM establish a connection smoothly? First, the myth of getting rich quickly with digital currency implies a lot of "magical" success stories to promote; second, the "high-tech" concept of blockchain can give full play to the imagination of MLMers; finally, the incentive mechanism of blockchain is like a disguised way of "recruiting people".

Therefore, once the concept of blockchain is put on, pyramid schemes are accumulating wealth like a booming business.

List of pyramid scheme coins (organized by the Ponzi scheme official account)

Since the myth of getting rich quickly with digital currency spread in 2017, many traditional MLM masters have also begun to enter the market. Yu Lingxiong, who claims to have 300,000 members, 30,000 disciples, and more than 600 agents, is now selling digital currency to his followers.

Yu Lingxiong has reached the frequency of issuing a new coin every month, including Xingyun Chain, Wanxiang Coin, Gold Coin, Spinach Coin, Car Chain, etc. However, these coins are not sold publicly to the outside world, but are promoted and raised in the WeChat group of agents.

Bibi News learned that Yu Lingxiong's personal Weibo is frequently posting information related to blockchain, with 6 posts on December 29 alone. Most of his information is reprinted from national departments' policies praising blockchain and some large-scale blockchain events.

In fact, the pyramid schemes of digital currencies have been further upgraded in 2018. They use high rebates as bait, then adopt corporate operations, invite well-known "successful people" to stand on the platform, and sometimes even have the government participate in endorsement. After all the "false prosperity" face projects are ready, they still use the most primitive "unlimited downline development" method to spread.

It is precisely after all these false packaging that many people did not even realize that the project might be involved in pyramid schemes before the project ran away. For example, in the official anti-fraud group of Bit110, most people did not have any real evidence, and most of them came to inquire about the project situation, and the words of inquiry were also extremely simple.

From the Bit110 community

However, pyramid scheme coins are not without flaws. In order to avoid public opinion, they usually choose some less well-known media to promote, and then use online communities to spread bombardment or offline salons to carry out brainwashing propaganda.

In addition, the management of the community is extremely violent. Once a member raises questions about the project in the community, he or she will be banned or even kicked out of the group chat.

"Professional" pyramid schemes even divide members into different levels, with each person's nickname followed by their recommender. In order to prevent group members from sharing what they have, group announcements even prohibit group members from adding each other as friends.

More importantly, the relevant digital currency codes are almost not open source, and digital currency transactions are only conducted on their own platforms.

In short, the routines of pyramid schemes are similar. Although blockchain has fallen into the hardest hit area of ​​pyramid schemes, digital currency enthusiasts still need to work hard to develop a pair of sharp eyes to judge right from wrong.

The blockchain ecosystem is being stigmatized

2018 may be the worst year for blockchain.

After the loud hype, countless outsiders entered the market, but blockchain is mired in a stigma. On the one hand, blockchain technology is difficult to implement, and many projects ran away immediately after breaking the issue price. On the other hand, digital currency has become a disaster area for pyramid schemes.

To outsiders, it is a pool of dirty water that no one dares to mess with.

For investors, the road to rights protection has become extremely difficult. my country's laws do not yet recognize digital currency as legal property, and related cases are sometimes not recognized by legal departments. Moreover, rights defenders lack awareness of rights protection, and many lack key evidence.

In fact, in the large-scale rights protection group organized by the investors of a certain project, although they all lost money to varying degrees, the response process to the inquiries initiated by Bibi News was intermittent, and Bibi News even had to add inquiries one by one.

Therefore, the real victims of pyramid scheme coins find it difficult to defend their rights due to ecological reasons, and they dare not come forward to defend their rights due to various personal reasons.

That’s why some “professional rights defenders” have already set their sights on the lucrative blockchain rights defender business.

For these "professional rights defenders", they wait for opportunities to attack blockchain project parties, lurk in the rights defender groups as victims, and then act as rights defender leaders, and then collect service fees, lawyer fees, group entry fees, management fees, etc.

For example, the recent 2345 and OKEx door-to-door rights protection incidents were all manipulated by so-called "rights protection professionals". They even have a set of "serial crimes" behavior, and all of this is driven by the trend of profit.

To some extent, such rights protection has changed its nature and is a criminal act. This practice is tantamount to adding insult to injury on the road to digital currency rights protection, making the road to rights protection even more difficult.

However, the stigma of blockchain is getting worse. Currently, many traditional media have closely associated "blockchain" with words such as "fraud", "scam", "MLM" and "dark web", which further hinders more outsiders from correctly understanding blockchain.

The imperfection of blockchain-related laws, from a positive perspective, has given blockchain a wider space for development. But from a negative perspective, it has also become a tool for criminals. Under the heavy pressure of the bear market, blockchain's "cleaning journey" has become increasingly difficult.