According to PANews, the People's Court of Xingyi City in Guizhou recently held a public trial for a case involving the crime of organizing and leading a pyramid scheme. The defendant, Qin, used the guise of cryptocurrency 'mining' to lure over 70 people into participating in the scheme, involving funds exceeding tens of millions of yuan.
The court found that from 2021 to 2022, Qin, along with Xu, Ding, and Bai (who are being tried separately), established a storage technology company in Xingyi City to seek illegal profits. They promoted cryptocurrency mining to the public, exaggerating the potential profits and encouraging investments in the company. After collecting a certain amount of investment funds, they purchased over a hundred computers to start 'mining.'
During this period, the company also launched a short-term leasing computing power hosting business, claiming to rent out 'computing power' to customers with promises of high investment returns. They actively developed participants to invest and encouraged them to recruit friends and family, offering corresponding commissions based on the level of investment and the number of recruits. The more investments and recruits, the higher the earnings (referral fees).
By June 2022, the company gradually stopped distributing 'dividends' to participants, subsequently announcing a suspension of operations and transferring all 'rental fees' from investors. The pyramid scheme involved five levels, over 70 participants, and disrupted the social and economic order significantly.
Based on the facts and sentencing circumstances, the court sentenced Qin to two years and six months in prison and fined him 8,000 yuan for organizing and leading a pyramid scheme.