[Virtual Currency Investment Project Claiming 'Play-to-Earn' Turns Out to Be a Pyramid Scheme, Four Team Members Sentenced]
According to a report by Justice Net, a virtual currency claiming to offer 'play-to-earn' and 'deflationary appreciation' attracted massive funds in a short period, developed dozens of members, and established a hierarchy exceeding three levels... Following a public prosecution by the Shishi City Procuratorate in Fujian Province, the court issued a first-instance judgment against the main members of the pyramid scheme organization. Four defendants were convicted of the crime of organizing and leading pyramid schemes, sentenced to fixed-term imprisonment, and fined. The defendants appealed the verdict. In July 2025, the appellate court ruled to reject the appeal and uphold the original judgment.
The court's review determined that although the organization used emerging concepts such as virtual currency and NFTs for packaging, its operational model still met the criteria for the crime of organizing and leading pyramid schemes as stipulated in the Criminal Law of the People's Republic of China:
1. The project indirectly set up 'entry fees' by requiring the purchase of virtual currency or participation in private placements involving virtual assets as a prerequisite for joining and recruiting others.
2. It established a clear hierarchical structure, with remuneration and rebates based on the number of recruits and the performance of subordinates.
3. There were no genuine business activities or sustainable sources of income, and the financial operations relied on funds from new members to pay returns to earlier participants, exhibiting clear characteristics of fraudulent asset acquisition.
