Shikongyun, a notable player in the Filecoin landscape, finds itself in hot water as Chinese authorities press charges related to fraudulent pyramid activities.
In Brief
One of the largest Filecoin companies in China, Shikongyun, is being sued by the Pingnan County People’s Court.
The allegations claim that the company was entangled in a pyramid scheme amounting to nearly $100 million.
The Pingnan County court has initiated legal proceedings against Shikongyun for its involvement in a pyramid scheme, allegedly racking up close to $100 million in the process.
A public hearing took place in the Southern District People's Court in Port, Guigang City, led by the Pingnan County People’s Court. The legal proceedings include accusations against Lai Mouhang and four accomplices, who are said to have managed misleading communications about this scheme. announcement As per an article by Zheng Huiyin on Weixin, the financial damage involved has exceeded £600 million.
In June 2018, Lai Mouhang and Lai Moujun established Shenzhen SpaceTime Cloud Technology Co., Ltd. They reportedly exploited this platform to present the process of mining File coins as enticing while coercively charging participants for the purchase or leasing of mining equipment within a well-defined hierarchy.
The defendants utilized recruitment-based incentives, promising high returns to lure participants and encouraging them to bring in others, leading to significant misconceptions about property ownership and resulting in disruptions to the economic and social landscape.
At present, virtually all Filecoin companies operating in China, along with their founders, are under scrutiny by law enforcement, as the government intensifies its crackdown on illicit activities within the cryptocurrency realm.
Launched in August 2017 by Protocol Labs, Filecoin stands as a Proof-of-Work cryptocurrency that has surged in popularity within China, largely due to its initial group of miners. However, as investigations into Filecoin firms unfold, investors are growing increasingly wary about the coin's safety and viability as an investment option.
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