Filecoin’s Shikongyun Sued by Chinese Authorities For Illegitimate Pyramid Schemes
Pingnan County People’s Court sued one of China’s largest Filecoin companies, Shikongyun.
The company allegedly sold almost $100 million in a pyramid scheme.
Pingnan County People’s Court sued one of China’s largest Filecoin companies, Shikongyun. The company allegedly sold almost $100 million in a pyramid scheme.
The Pingnan County People’s Court conducted a public hearing at the First Trial Division of the Southern District People’s Court in Port, Guigang City. The case involved the defendant, Lai Mouhang, and four others who orchestrated and directed communication activities. According to an announcement by Zheng Huiyin on Weixin, the amount involved exceeded ¥600 million.
According to the prosecution, in June 2018, the defendants Lai Mouhang and Lai Moujun founded Shenzhen SpaceTime Cloud Technology Co., Ltd. Subsequently, Lai Mouhang and accomplices exploited the SpaceTime Cloud Company platform to purportedly mine File coins. Participants were compelled to pay fees for buying or leasing mining machines in a structured hierarchy.
They were accused of basing rebates on the number of recruited personnel, enticing participants with lucrative returns, urging them to involve others, and misleading them into obtaining property, thereby disrupting the economic and social order.
Currently, almost all Chinese Filecoin companies and their founding teams are under investigation by the Chinese police. Moreover, the Chinese government is actively combating illicit behavior in the cryptocurrency sector.
Filecoin is a Proof-of-Work cryptocurrency launched in August 2017 by Protocol Labs. Remarkably popular in China, the coin gained traction primarily due to its initial concentration of miners in the region. However, as Chinese law enforcement probes Filecoin enterprises, investor confidence in the cryptocurrency’s safety as an investment is waning.
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