Dongguan tried a pyramid scheme case using Bitcoin

People's Daily Online, Dongguan, March 23: Pyramid schemes have repeatedly deceived people in new forms, but the law is long and no one can escape. Today, the Dongguan Intermediate People's Court publicly tried the case of Wu Mou suspected of organizing and leading pyramid schemes. The case used the Internet cloud and Bitcoin to conduct pyramid schemes, and the "advanced" and "fashionable" methods made it difficult to guard against. However, due to irrefutable evidence, the defendant Wu Mou in this case was eventually prosecuted by the procuratorate for organizing and leading pyramid schemes, and the amount involved was more than 40 million yuan.

The prosecution claimed that in the second half of 2013, Cai (handled in another case) advertised that investing in the mining machines of Krypton Energy Group (without business registration) in the capacity of Asia Marketing Director, could obtain high returns in Bitcoin, which could be freely withdrawn and traded. Later, Cai actively wooed Xu (handled in another case) to become a member of Krypton Energy Group. Xu then developed the defendant Wu in this case, who in turn developed Wang Fu and Qian, and gave Wang Fu and Qian their own four mining machines linked to Xu's mining machine for free. Wang Fu and Qian continued to develop a large number of downlines based on the four mining machines, with a total of 32 people and an investment amount of 42,020,743.68 yuan.

During this period, Wu, as the mainland market director of Krypton Energy Group, organized and attended Krypton Energy Group marketing meetings and organized member tours many times. At the end of 2014, the price of Bitcoin of Krypton Energy Group fell sharply, causing panic among investors. Wu claimed through WeChat, small meetings, etc. that the Krypton Energy Group website had been adjusted and would soon be restored, and encouraged investors to buy at a low price. At the end of February 2015, the Krypton Energy Group website was completely closed, and Cai, Wu and others could not be contacted. After many investors reported the case, the Municipal Public Security Bureau placed Wu under criminal detention on March 27, 2015, and arrested him on April 25 of the same year.

The procuratorate believes that the defendant Wu organized and led pyramid selling activities, seriously disrupting the market order, the circumstances are serious, the criminal facts are clear, and the evidence is sufficient. He should be held criminally responsible for organizing and leading pyramid selling activities.

Wu admitted her crime at the trial, but she did not think she was guilty of organizing and leading pyramid selling activities. Wu believed that she was also one of the investors and a victim. She did not organize the foreign tours and meetings, which were all done by Xu, and she only assisted at Xu's request; all the messages she sent on WeChat were written by Xu, and she only forwarded them... All the above defenses, the witness testimonies of many investors presented by the procuratorate, bank statements and files extracted from Wu's USB flash drive all showed that Wu's defense was so weak that she was eventually punished by law.

Wu showed some remorse. Photo provided by Dongguan Intermediate Court

In an era when the Internet is so developed, MLM also uses the Internet as a carrier to package itself into a new model. Through brainwashing marketing and high investment returns, it lures investors to join and continuously develop downlines. MLM forms a huge "capital chain" by continuously collecting investment fees and membership fees from investors, but downlines are not unlimited. When downlines cannot be developed, the myth will be shattered. Investors must open their eyes. MLM and direct selling, investment and speculation, loss and profit are often just a thought away. (Zhang Huian Yanling)

Source: People's Daily Online