On September 3, netizen Cao posted a message on Weibo, reporting under his real name that Meituan’s food delivery designer Sun had used working hours to conduct digital asset online pyramid scheme fraud, and during the period he also made extensive use of Meituan’s endorsement.

It is reported that Cao and Sun are both designers and are in the same design group. On July 28 this year, Sun began to promote the "make money anyway" and "turn 100,000 into 200,000" projects to Cao and others in the group, inviting group members to "invest" in her and promoting "absolutely stable within three months."

The project is called KCI, and KCI is the name of the blockchain company. The company has created two systems, one is the KCI blockchain system and the other is the smart contract system.

Among them, smart contracts are mainly used to attract members. When a certain number of members is reached, the bubble will be digested in the blockchain system. The K coins in the blockchain system can be used for shopping, cash, and C2C transactions in the future. K coins are used in exchanges just like Bitcoin. They are real virtual digital currencies that can rise or fall.

According to Cao, the KCI project is a typical downline-recruiting project. Sun can get a 7% commission for developing a downline. It is a typical pyramid scheme fraud project, but it is packaged with blockchain.

The specific gameplay is: the upstream company issues KCI coins - the upstream company promises to buy back KCI coins at a high price after half a month - the downstream company buys KCI coins - the upstream company takes commissions - the upstream company runs away - KCI coins become waste paper.

Cao believes that this method is actually using the name of blockchain to promote KCI coins as legal coins that can be listed on exchanges, deceiving downstream buyers to buy coins, and then running away after getting the money. This is a typical pyramid scheme scam, and KCI is just a tool for scammers to gain the trust of victims.

The article stated that Sun also took advantage of the trust between acquaintances, used threats and inducements in private chats, and said that "all Meituan colleagues have invested", using Meituan as an endorsement to promote pyramid schemes and brainwash people during working hours.

Cao also revealed that Sun not only defrauded group members, but also recruited his subordinates to Meituan. Before the KCI scam, Sun had already carried out several similar scams, such as ADC and ICA. About 17 people from Meituan's food delivery design team were involved in the ADC scam, and it is not clear whether there are more people involved.

Bianews immediately added Cao as a friend and interviewed him about the matter.

According to Cao's recollection, Sun and his friend "Xiao Xi" pulled Cao and 17 other people into a project group. "I don't know what Xiao Xi did, but it was mainly these two people who pulled people in."

Cao said that when he was added to the group, Sun and Xiaoxi promised that "the order will be queued in seven days, and then the money will be transferred. You can withdraw the money after another seven days." However, in August, the order queue became faster and faster, and it became 24 hours, and the money could not be withdrawn. However, Sun and Xiaoxi said that this was normal, which encouraged Cao and others to continue buying.

However, on August 10, four or five days later than the agreed date, the money still could not be withdrawn. Cao and others asked Sun and his partner, and the answer they got was that Cao and others needed to "collect the money" themselves - Cao even went to Shaoxing with Sun to "catch people".

According to Cao's recollection, Sun and Xiaoxi said they knew where the "upper house" was. They asked everyone in the group to go and find the "operator" offline, and clearly stated that "those who go have a chance to get the money, and those who don't go have no chance."

"It turned out that all the addresses provided were fake," said Cao.

Cao also said that Sun promised that the project had "low risk" and "guaranteed profit", and told one of the people who was very familiar with her, "I will compensate for the losses, it is absolutely impossible for me to compensate you."

After the incident, Sun and Xiaoxi posted their conversations with their "superior" to Cao and others, and stated that they were also victims.

Cao said that Sun has now completely denied promoting the project, saying that it was "the money you wanted to invest yourself" and has blocked him.

Afterwards, Bianews tried to add Sun as a friend. Sun did not accept Bianews' friend request, but she told Bianews through the dialog box on the add friend page, "I am a victim, I have lost a lot of money, and I only communicate with lawyers and companies."

Bianews asked Meituan about this matter and received a response: We are investigating and are actively contacting the whistleblower and the person being reported.

The following is the full text of Cao’s revelations:

1. The background of Sun Xiaoya’s KCI project

1.1 Sun Xiaoya’s introduction of the KCI project during the fraud

Sun Xiaoya introduced that KCI is a blockchain company. There are two systems, one is the KCI blockchain system, and the other is the smart contract system, which is the mutual assistance model. The smart contract is mainly to attract members, and when a certain number of members are reached, the bubble will be digested in the blockchain system. K-pass in the blockchain system can be used for shopping, cashing, and C2C transactions in the future. K-coin is like Bitcoin, which is used in exchanges. It is a real virtual digital currency that can rise or fall.

1.1.1 WeChat evidence

1.2 The KCI project is a pyramid scheme fraud

The KCI project is a typical downline-recruiting project. Sun Xiaoya can get a 7% commission for developing a downline. It is a typical pyramid scheme fraud project, but it is packaged with blockchain.

The specific gameplay is: the upstream company issues KCI coins - the upstream company promises to buy back KCI coins at a high price after half a month - the downstream company buys KCI coins - the upstream company takes commissions - the upstream company runs away - KCI coins become waste paper.

To sum up, this method actually uses the name of blockchain to promote KCI coins as legal coins that can be listed on exchanges, tricking downstream buyers into buying coins. The upstream buyers then run away after getting the money. This is a typical pyramid scheme, and KCI is just a tool for scammers to gain the trust of victims.

1.2.1 WeChat evidence

The Guardian Program applet of Tencent Security Center shows that KCI Cultural Chain has been marked by 839 people, and the WeChat evidence shown in 1.1.1 clearly shows that the project has three major characteristics: entry fee, recruiting people, and team-based compensation, which is a typical pyramid scheme scam.

2 The story of Sun Xiaoya’s pyramid scheme fraud

2.1 The cause of Sun Xiaoya’s pyramid scheme fraud

2.1.1 The relationship between Cao Yanni and Sun Xiaoya

Cao Yanni and Sun Xiaoya are both designers. Designers usually have some gatherings, so they organized a WeChat group called "UX Friends Circle" and "OX-FRIDAY". Cao Yanni got to know Sun Xiaoya and kept chatting in the group. The victim designers He, Zhang, and Huang were also in the group and got to know Sun Xiaoya.

2.1.2 Sun Xiaoya began to promote the KCI pyramid scheme fraud project in the group

On April 28, 2018, Sun Xiaoya began to promote the "Make money anyway" and "Turning 100,000 into 200,000" projects in the group, inviting group members to "invest" in her and promoting the idea that "it will be absolutely stable within three months."

2.1.2.1 WeChat evidence

2.1.3 Sun Xiaoya knew that KCI was a pyramid scheme

When Sun Xiaoya was promoting the project in the group, several group members suggested that the project was a pyramid scheme, but Sun Xiaoya turned a blind eye and replied, "So what?" and "You make money anyway." It can be seen that Sun Xiaoya already knew the nature of the project, but still insisted on going her own way.

2.1.3.1 WeChat evidence

The picture was provided by a friend in the group. The avatar has a photo of the horse.

2.1.4 Sun Xiaoya carried out pyramid scheme fraud during work hours

When Sun Xiaoya committed fraud, she used working hours to conduct fraud-related activities many times, which seriously affected the image of Meituan. Imagine if this matter continues to ferment, and the public learns that Meituan employees actually used working hours to commit illegal and criminal acts, what will they think of Meituan?

2.1.4.1 WeChat evidence

The WeChat account shows that July 9, 2018 was Monday, which was a weekday during working hours, and Sun Xiaoya said "making pictures at work", which shows that Sun Xiaoya made pictures related to pyramid schemes and frauds during her working hours.

July 11, 2018 was a Wednesday, and Sun Xiaoya committed inducement fraud during working hours.

July 13, 2018 was a Friday, and Sun Xiaoya committed inducement fraud during working hours.

2.2 How Sun Xiaoya Fraudulently Sold the Pyramid Scheme

2.2.1 Sun Xiaoya used Meituan as an endorsement to lure people into the scheme and concealed the fact that it was a pyramid scheme

When public promotion in the group failed, Sun Xiaoya took advantage of the trust between acquaintances and used coercion and inducement in private chats. She also said that all her colleagues at Meituan had invested, used Meituan as an endorsement, promoted the pyramid scheme and brainwashed people during working hours.

When defrauding Huang, he chatted privately every few days, constantly encouraging Huang to join the game, and complained that Huang's "execution ability" was not enough. He pulled his colleagues into the game and used this as an endorsement to continue the fraud.

2.2.1.1 WeChat evidence

2.2.2 Sun Xiaoya’s fraudulent activities penetrated deep into Meituan, involving several employees

Sun Xiaoya not only defrauded group members, but also developed her subordinates to Meituan. Before the KCI scam, Sun Xiaoya had already carried out several similar scams, such as ADC and ICA. About 17 people from Meituan's food delivery design team were involved in the ADC scam, and it is not clear whether there are more people involved.

2.2.2.1 WeChat evidence

2.2.3 Four victims were defrauded of up to 350,000 yuan, and colleagues in the company were involved in a huge amount of money

The four victims are Cao Yanni, He, Zhang and Huang. The amounts of damages are as follows:

Cao Yanni: 100,000 yuan.

He: 175,000 yuan.

Zhang: 60,000 yuan.

Huang: 15,000 yuan.

Total: 350,000 yuan.

The amount of money that approximately 17 victims of Meituan were defrauded of is unknown, but the amount involved is huge.

2.2.3.1 WeChat evidence

Cao Yanni was defrauded of 100,000 yuan

2.3 The outcome of Sun Xiaoya’s fraud case

2.3.1 How Sun Xiaoya’s fraud happened

On August 10, 2018, the KCI platform ran away. Sun Xiaoya knew that KCI was a pyramid scheme fraud. In order to appease the victims, she came to Shaoxing on August 11, 2018 and "arrested" the "person in charge" of the KCI platform, but the address was actually a fake one. Then she returned to Beijing and ignored the matter.

2.3.2 Sun Xiaoya shirked responsibility in every possible way

After the incident, Sun Xiaoya frantically tried to shirk responsibility, saying "you bear your own risks", denied promising "guaranteed profits", and asked people not to call the police, falsely saying "calling the police will leave a criminal record". After the victims gradually realized that it was a pyramid scheme scam, she blocked the victims on WeChat.

2.3.2.1 WeChat evidence

2.3.2 Sun Xiaoya's ten questions and our counter-questions

After the incident was exposed in the group, facing the pressure, Sun Xiaoya made all kinds of excuses and asked the following ten questions:

We thought this was a far-fetched argument and asked a counter-question, but Sun Xiaoya did not respond:

2.3.3 Sun Xiaoya made a profit of more than 100,000 yuan by engaging in fraud

The KCI project was not Sun Xiaoya's first fraud. She had committed several frauds before KCI. She kept changing her fraud methods and committed fraud repeatedly, making a profit of more than 100,000 yuan from each "fraud".

2.3.3.1 WeChat evidence

3.1 Sun Xiaoya’s fraudulent methods

3.1.1 Inducing the use of Jiebei

In order to lure more funds into the game and attract more fees, Sun Xiaoya induced victims to cash out through Jiebei. She disregarded risks for the sake of profit and was blinded by greed, which is outrageous.

3.1.1.1 WeChat evidence

3.1.2 Inducing the opening of a small account

Since the KCI project is a typical pyramid scheme scam with the characteristics of recruiting people, in order to maximize profits, Sun Xiaoya induced victims to register different mobile phone numbers, absorbed large amounts of funds by opening small accounts, and made crazy profits.

3.1.2.1 WeChat evidence

3.1.3 Concealing the fact of pyramid selling and promising to make money

In order to lure victims into joining the scheme, Sun Xiaoya deliberately concealed the fact of pyramid schemes, promised that they would make money, and used the trust between friends to frantically defraud funds.

3.1.4 Still trying to trick people into paying more before the incident

After joining the rights protection group, I found that many people knew about the incident as early as August 6, and Sun Xiaoya encouraged us to place more orders and asked us to continue to make payments and buy KCI coins. When the incident happened, she was still committing fraud and had no bottom line, causing the four people to suffer even greater losses. This further confirmed her fraudulent nature, and her constant claim of being a victim was just a pretense.

3.1.4.1 WeChat evidence

4. Report letter statement

I, Cao Yanni, solemnly promise that this report letter is written by me and everything in the report letter is true. I am willing to cooperate with Meituan’s investigation.