Chinese Court Handles First Case Involving Cryptocurrency Pyramid Scheme

According to Foresight News, the People's Court of Chenggong District in Kunming City recently handled its first case involving a cryptocurrency pyramid scheme. The suspects, led by a person named Yang, promoted the 'XX Eagle' project as a blockchain-based financial platform from an unnamed country, claiming it was backed by foreign banks and funds. They falsely claimed that the platform's DAM (commonly known as 'egg' or 'egg coin') could be exchanged with the virtual currency USDT (commonly known as 'U coin' or 'Tether') at a 1:1 ratio. Yang and others lured participants to deposit USDT into the 'XX Eagle' online platform and encouraged them to develop lower-level members in various places through invitation codes. Wealth levels 1-4 were set based on the number of members recruited and the amount of funds deposited. After analyzing the blockchain assets involved in the case and conducting judicial accounting appraisals, it was found that as of May 30, 2022, the total amount of USDT deposited by 'XX Eagle' project participants was 9,762,260.02, equivalent to more than 65 million yuan. The Chenggong court sentenced Yang and others to one to six years in prison for organizing and leading pyramid schemes, in addition to imposing fines. The court also confiscated more than 13 million yuan in illegal proceeds, as well as mobile phones and USB drives involved in the case.