China Investigates Cryptocurrency Projects for Pyramid Scheme Allegations

Chinese authorities are investigating several cryptocurrency projects suspected of operating as pyramid schemes. The Shiyan City Market Supervision Administration in Hubei Province has issued a risk warning, launching an investigation into the operations of ‘Youke Chuang,’ ‘Shiyi Hui,’ and ‘Ronghui Capital.’ These projects allegedly use overseas platforms and referral models to incentivize membership growth, leading to high-return promises that resemble pyramid schemes. This action aligns with China’s prohibition on virtual currency trading, prompting concern among regulators and investors.