Unveiling The Pyramid Scheme of Shenzhen Shikongyun Tech: A Dark Chapter in Crypto History

Gothic-style courtroom, a monumental pyramid made of coins at the center, surrounded by shadowy figures with ambiguous intentions. A sense of deception and entrapment in the air, as strings of connected people hinting at a network. Ethereal light seeping from a gap in the pyramid conveys promises of exaggerated returns, resulting in chaos and distortion.

In what could be one of the largest pyramid schemes in crypto history, the trial of Shenzhen Shikongyun Technology, a significant Filecoin mining firm has just commenced. The company’s executives, including the founders, stand accused of orchestrating a monumental $83.2 million scheme, per the prosecution.

There is much to parse from these allegations, suggesting that duplicitous machinations were en vogue. Predicated principally on the prospect of mining FIL coins, the firm allegedly enticed potential customers into joining the scheme. Their entry into the scheme rested upon acquiring membership qualifications by advancing fees for the procurement or leasing of mining machines.

The scheme cleverly adopted a hierarchical structure, enticing participants to rope in even more individuals. Lure of significant returns proved to be fruitful bait. The prosecution, painting an grim picture, stated that the accused leveraged exaggerated profit expectations to attract investors, promising immoderate returns based on storage servers. The defendants, according to the prosecution, manipulated substantial returns to draw further participation, thereby distorting economic and societal order.

Looking deeper into the case, two of the principal defendants, Lai Mouhang and Lai Moujun, reportedly established Shenzhen Shikongyun Technology back in 2018. They started promoting the so-called “investment prospects” of distributed storage technology and Filecoin’s economic model, using a community website and a WeChat public account. With a seemingly unwavering desire for growth, they then incorporated platform filpool.io, using it to enhance their operation and the perceived profitability of the technology.

However, allegations of fraud surfaced in early 2021; yet another platform, bpool.io, was developed for executing Multi-Level Marketing activities (MLMs). This platform required participants to invest more money and recruit additional individuals to enhance income, allegedly deceiving them, and according to prosecutors, defrauding them altogether.

The unveiling of the operation in May 2022 led to the arrest of company executives. At this point, filpool.io had accumulated 57,122 members and bpool.io, 37,015, securing over $83 million and 62 million coins collectively via the platforms.

This case emerges in an intriguing period for China in the realm of crypto. Although mainland China imposed a ban on all crypto transactions in September 2021, it continues robust efforts toward developing its central bank digital currency (CBDC). Contrastingly, Hong Kong pursues its aims to become a premier international crypto hub, awarding the first licenses to crypto firms under a fresh regulatory framework. Despite the winds of change in the broader crypto landscape, it seems that the bedrock of trust and legality remains an unwavering requirement.

Source: Cryptonews

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