Five executives from an alleged Filecoin mining service company are facing a lawsuit in Pingan District People’s Court in China, accused of transferring millions of dollars to their personal accounts and abandoning investors to their fate. According to prosecutors, the company had more than 57,000 users, and the scammers collected over 100 million dollars from their customers. As pressure on the artificial intelligence and crypto sectors in China increases, the Chinese police continue to conduct operations to combat fraud cases and raise public awareness.
Attention to the Amount Collected
On August 14th, local media reported that the court held a public hearing about a case that could potentially set a precedent for how crypto sector plans are prosecuted and regulated in China. The lawsuit accuses the Shenzhen Space-Time Cloud Technology company executives of setting up a pyramid scheme that raised approximately 100 million dollars and defrauded investors.
According to the report, the defendants Lai Mouhang and Lai Moujun founded the company in 2018. In the following years, they hired other executives and expanded the company’s operations to promote investment opportunities related to Filecoin’s reward system and business model.
Trouble Persists in China
Prosecutors allege that the defendants made exaggerated profit predictions to attract participants to invest in joint Filecoin mining ventures. The lawsuit claims that the defendants sold storage servers and promised high returns within a pyramid structure. Prosecutors claim that the company collected 100 million dollars from over 57,000 users. According to prosecutors, the executives disrupted the company’s economic order by using data manipulation methods to defraud participants.
Meanwhile, the Chinese police continue to intensify pressure on crypto and fake artificial intelligence. On August 10th, Chinese authorities reported 79 cases of fraud involving deepfake AI and arrested 515 individuals. They also arrested 21 individuals suspected of being involved in a 54 million dollar Tether fraud.
