Ezra Reguerra11 hours agoMining service provider faces $100M lawsuit over pyramid scheme allegations in ChinaProsecutors alleged that the executives of a Filecoin mining project orchestrated an elaborate pyramid scheme and scammed the participants.11914 Total views17 Total sharesListen to article 0:00NewsJoin us on social networksFive executives from a Filecoin mining service are facing a lawsuit at the People’s Court of Pingan County in China over allegations that they pocketed millions of dollars and left investors in ruin. 

On Aug. 14, local media reported that the court held a public hearing on a case that could potentially set a precedent in China for how crypto schemes are prosecuted and regulated. The lawsuit accuses Shenzhen Space-Time Cloud Technology executives of setting up a pyramid scheme that amassed around $100 million and scammed their investors.Report on the public hearing held at the People’s Court of Pingan County. Source: Weixin

According to the report, defendants Lai Mouhang and Lai Moujun created the company in 2018. They hired other executives in the following years and expanded the company’s operations to promote investment opportunities connected with Filecoin’s rewards system and business model.

Prosecutors alleged that the defendants provided exaggerated profit predictions to attract participants into investing in their joint Filecoin mining endeavor. The lawsuit alleges the defendants sold storage servers and promised great returns in a pyramid structure.

The prosecutors claim the company got $100 million from more than 57,000 users. According to the prosecutors, the executives disrupted economic order by using deception to defraud participants.

Related:US and China AI-tech standoff shows signs of spreading to other countries

Meanwhile, Chinese police have been facilitating a crackdown on crypto and deepfake artificial intelligence. On Aug. 10, Chinese authorities reported that there had been 79 cases of fraud involving deepfake AI, with 515 individuals arrested. At the same time, the authorities arrested 21 people who were suspected of being involved in a $54 million Tether (USDT) money laundering scheme.

Collect this article as an NFTto preserve this moment in history and show your support for independent journalism in the crypto space.

Magazine:China’s risky Bitcoin court decision, is Huobi in trouble or not? Asia Express# Law# China# RegulationAdd reactionAdd reactionRelated NewsWho invented NFTs?: A brief history of nonfungible tokensHow will Bitcoin halving affect BTC price, and is DeFi dead?Crypto adoption crosses party lines amid Washington’s political deadlock