Chinese police dismantle cryptocurrency pyramid scheme and seize $5.4 million in XRP

In Gansu province, law enforcement officers arrested seven organizers of a multilevel financial pyramid scheme and seized more than 8.46 million XRP (~$5.4 million).

The Chinese police cracked a large-scale pyramid scheme, called the “Ripple UnionPay Community”, which developed more than 47,000 members and seized more than 8.46 million Ripple coins. https://t.co/ZA9CWoTlKQ

— Wu Blockchain (@WuBlockchain) February 24, 2022

According to authorities, in March 2021 investigators found that through social platforms a crypto investment scheme called Ripple UnionPay Community was being promoted. Users were promised high returns and referral rewards for recruiting new investors.

To participate in the scheme, investors were required to purchase XRP and fund an account in the Ripple UnionPay Community app. During the investigation, police identified the pyramid’s organizers who had commissioned this software to handle client interactions.

In addition to cryptocurrency, smartphones, computers and other items related to the case were seized from seven detainees. At the time of the arrests, the pyramid had 18 levels, involving more than 47,000 investors nationwide.

According to data from the Bank of Russia, in 2021 every second financial pyramid in Russia attracted funds in cryptocurrencies or offered investments in non-existent digital assets.