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Pyramid scheme investigations in China double during 2017
October 5, 2017 / 3:15 PM / a month ago

Pyramid scheme investigations in China double during 2017

BEIJING, Oct 5 (Reuters) - The number of pyramid schemes investigated by Chinese police more than doubled in the first nine months of the year, with cases involving nearly 30 billion yuan ($4.5 billion), the official Xinhua News Agency said on Thursday.

Police investigated 5,983 schemes from January through September, an increase of 118 percent, with internet-based pyramid schemes on the rise, many involving virtual currencies, according to the report which cited the Ministry of Public Security.

Chinese regulators periodically clamp down on what they deem to be illegal fundraising schemes, including online peer-to-peer lending platforms and pyramid schemes.

In August, China launched a campaign against pyramid selling organisations disguised as job recruitment agencies.

Last month, several cryptocurrency exchanges said they would shut their mainland trading platforms as regulators crack down on what they see as schemes to tempt Chinese investors to speculate on digital tokens.

In China, pyramid scheme organisations typically prey on vulnerable or poorly-educated victims by luring them with the promise of well-paid jobs. Victims are instructed, often under duress, to recruit friends and family or borrow money from them.

$1 = 6.6533 Chinese yuan renminbi Reporting by Tony Munroe; Editing by Robin Pomeroy

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