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Chinese Authorities Crackdown On Pyramid Crypto Scheme And Seizes 8.46 Million Ripple (XRP)

source-logo  thecryptobasic.com  + 1 more 24 February 2022 14:30, UTC

Chinese Authorities Seizes 8.46 Million Ripple (XRP).


Chinese local authorities have cracked down on a cryptocurrency Ponzi scheme operating within the Gansu province. 

Police Busted the Illicit Operation

Local news outlet Xinhua News Agency reports today that the massive crackdown resulted in the arrest of seven-man suspects believed to be the main operators of the platform. 

The police also confiscated 8.46 million units of Ripple (XRP), worth around $5.4 million. 

Aside from the arrest and seizure of the 8.46 million XRP coins, the police also seized 15 smartphone devices, PC, as well as other devices that were used for the operations. 

The Ponzi scheme known as Ripple UnionPay Community has been widely promoted across various social media platforms like QQ and WeChat. 

The operators, who claim to be affiliated with the Ripple project, promised investors mouthwatering incentives in the form of node dividends, performance bonuses, community promotion rewards, etc. 

Investors are also promised a high ROI when they invest in the platform using XRP. However, following an investigation, which started in March 2021, the operators of the platform were headed by one Mr. Wang and Mr. Zang. 

So far, the Ripple UnionPay Community has amassed over 47,000 users from more than 30 provinces, including Gansu, during the time it launched.  

The platform has about 18 multi-level marketing (MLM) levels investors can strive to reach in a bid to increase their profit. 

At the moment, the suspects have been charged in court and are facing multiple financial-related charges. 

Cryptocurrency Ponzi Scheme Operations

Cryptocurrency-related Ponzi schemes are no different from other platforms that use Fiat as the main payment method. 

The mode of operation for these illicit operators is to lure unsuspecting victims into investing in the platform by promising them mouthwatering rewards. 

The funds invested are recycled within the community with new users requested to pay for the existing ones. 

However, this form of investment has never been sustainable as the operators of these platforms may either get greedy along the line or the operation may cease to function when no new member joins the scheme. 

China Crackdown on Crypto

Meanwhile, China last year announced a massive crackdown on crypto-related activities, thus causing crypto companies, including mining firms, to relocate to other cities. 

The unfortunate development caused the price of Bitcoin and other cryptocurrencies to crash beyond expectations

thecryptobasic.com

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