China Signals Clampdown on Digital Currency Pyramid Schemes | 코인긱스

China Signals Clampdown on Digital Currency Pyramid Schemes


Get Trading Recommendations and Read Analysis on for just $39 per month.

China’s Ministry of Public Security and the State Administration for Industry and Commerce (SAIC) have decided to jointly work to curb the spread of online pyramid schemes, according to a ministry notice. The public security organs have detected a large number of national pyramid schemes, including some involving cryptocurrency.

The notice comes amidst reports of a plan by the People’s Bank of China to encourage the government to ban cryptocurrency trading.

While progress has been made against such pyramid schemes, such activities are still a problem, in particular Internet pyramid schemes which cause major economic losses to masses of people and distort the social credit system, the notice stated.

The joint action will focus on different types of multi-level marketing (MLM) activities. One group of activities is characterized as “rebate consumer,” “mutual funds,” “virtual currency,” “investment management” and “online games.” Another type of criminal activity falls under the guise of “charity,” “helping the poor,” “ innovation,” “average wealth” and “civil-military integration.”

A third type of criminal activity involves online pyramid selling activities for disadvantaged groups such as students, subsistence allowances and the disabled.

Target: MLM Organizations

Members of these network MLM organizations assist in the transfer of funds and provide website design and maintenance, the notice stated.

The public security organs and the industrial and commercial departments will work to strengthen the linkage between them to control criminal activity. They will also work with criminal justice and administrative law enforcement.

The security organs will establish network monitoring mechanisms involving telecommunications management as well as large Internet companies.

Also read: China to restrict cryptocurrency OTC trading and mining, no definite plans yet

Focus On Cyber Attacks

A special action known as “net net 2018” will work to prevent cyber attacks and promote website registration and support the inspection of advertisements.

“We will conduct all-round and efficient inspections and dispositions and make great efforts to purify the cyberspace so as to comprehensively promote the establishment of ‘MLM-free network platform’ and ‘MLM-free communities,” the notice stated.

The security organs will also offer advice to government organizations and promote the status of network marketing. They will punish the members of the pyramid selling organizations and safeguard the rights of the broad masses of people and the economy and the financial order.

Featured image from Shutterstock.

Follow us on Telegram.


No comments

국내 게임사, 게임과 블록체인 결합에 나서

국내 게임사들이 자사 게임에 블록체인을 적극 적용해 게임 개발을 마치고 출시에 나섰다. 3일(현지시간) 다수의 언론보도에 따르면 한빛소프트, 네오위즈 및 위메이드 등 다양한 국내 게임업체들이 블록체인을…