In the Chinese province of Gansu, 8.46 million Ripple (XRP) was seized in a raid on a crypto ponzi operation, and local teams blocked an altcoin ponzi scheme. As Kriptokoin.com, we are providing the details…
Illegal operation raided by the police
According to local media, the giant ponzi operation resulted in the arrest of seven people who are thought to be the operators of the platform. In addition, authorities confiscated 8.46 million Ripple (XRP) worth $5.4 million. In addition to 8.46 million XRP, 15 smartphones, PCs and other equipment used in the activities were paired. The Ripple UnionPay Community, a ponzi scam, is heavily organized on social media platforms like QQ and WeChat. Operators claiming to be associated with the Ripple project have offered investors node payouts, performance bonuses, and community promotion rewards, among other methods.
While using XRP to invest on the platform, investors are promised huge returns. After an investigation that started in March 2021, it was determined that the operators of the platform were two individuals named Wang and Zang. When the Ripple UnionPay Community was founded, it had more than 47,000 users from more than 30 provinces, including Gansu. Investors are encouraged to reach one of the platform’s 18 multi-level marketing (MLM) levels to increase their earnings. The defendants have now appeared in court and are now facing various financial charges.
How ponzi schemes work
Ponzi schemes based on cryptocurrencies are no different from those based on other platforms that use fiat currencies as their primary payment mechanism. The strategy used by these criminals is to persuade victims to invest in the platform by promising them attractive returns. The deposited money is returned to the community and new users are asked to pay for the old ones. On the other hand, the sustainability of such an investment has never been proven. The operators of these platforms may be greedy down the road, or the operation may be shut down if no new members join the program.
Chinese crackdown on Bitcoin and altcoins
Meanwhile, China last year announced a significant restriction on crypto-related activities, including mining operations. The adverse event resulted in the price of Bitcoin and other cryptocurrencies falling far below forecasts.
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