The Chinese authorities have announced that they have prosecuted those behind the Magic Data Chain (MDC) pyramid scheme, which was purported to be a crypto project. Eight people have been charged in China’s Rong County, Zigong City, for stealing approximately $147 million from unsuspecting victims.
According to a local report, the masterminds of this scam began in July 2019, building a “blockchain website of Magic Data Chain and a virtual currency trading website of XIN Exchange” to perpetuate their Ponzi scheme. They claimed that they would offer users access to a blockchain as well as an exchange that they could use for swapping tokens.
The report stated that the scheme was able to amass “a transaction amount of up to 1 billion yuan, more than 2 million registered members, and more than 200,000 participants in 30 provinces, autonomous regions, and municipalities across the country.”
The authorities decided to swoop in to arrest some members of the Ponzi scheme’s team in “Sichuan, Shandong, Liaoning, and other provinces” in May 2021. Some masterminds were arrested as a result of the collective effort of different governmental agencies.
During the operation, twelve people were apprehended, and the authorities recovered more than 30 million yuan ($4 million) in assets. A few months later, in March 2022, eight individuals were arraigned before the Rong County People’s Procuratorate.
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