CNR: 40000 Victims Lost 4 Billion Yuan On Yaoucoin Pyramid Scheme
After the ICO Ban in September 2017, many scamming projects that took the name of digital currency has turned to underground trading. Recently, an Asia-Euro Coin scams has been cracked down the Chinese police. Over 40,000 victims have lost around 4 billion yuan as per CCTV report in September. Yesterday, the same news was broadcast again on China National Radio(CNR).
Suspect of Yaoucoin Scheme claims to build the No.1 branding of digital currency in China. Credit:CCTV
The strategy of the YaouCoin is simple: rise and rise of token price. To make their story convincing, some novel concepts are also being flagged: limitedly supply, open source code, independent wallets, decentralization and the use of the 3.0 blockchain technology. It’s difficult for the general public to see through the smoke of these terminologies. By the time when the scheme was cracked down, the YaouCoin amassed over 4 billion yuan from over forty thousand participants, among which 1 billion was paid as commissions, 2.7 billion for withdrawal and 300 million was taken by scheme operators.
The thriving of such pyramid schemes took advantage of the ICO ban and occupied the market in a short while.
Comments from a bitcoin fans:
“Under the camouflage of digital currency, these projects conduct no code research on bottomlayer blockchain. It’s nothing but a fruad.”
According to the data from the Ministry of Public Security, internet pyramid schemes based on digital currency are spreading fast in the name of “financial innovation”. This kind of fraud is highly deceptive. As of the first three quarters of this year, 5,983 cases of such MLM crimes have been filed around the country, an increase of 118.5% over the same period of last year, involving an amount of nearly 30 billion yuan.
CNR’s report is to expose these fraudulent schemes so that real innovation can survive and scammers has nowhere to hide.
MLM never steps away but always linger to catch next wave of prey.