Recently, the People’s Court of Kunming City’s Chenggong District heard its first case involving a pyramid scam employing cryptocurrencies. The ‘XX Eagle’ project was marketed by the suspects, who were directed by a man called Yang, as a blockchain-based financial platform from an undisclosed nation that had the support of international institutions and investors. They made a misleading assertion that the virtual currency USDT, also known as “U coin” or “Tether,” could be traded for the platform’s DAM, also known as “egg” or “egg coin,” at a 1:1 ratio.
Through invitation codes, Yang and associates enticed users to deposit USDT into the “XX Eagle” online platform and urged them to cultivate lower-level members in numerous locations. Based on the quantity of money deposited and the number of members recruited, wealth levels 1-4 were established. Following a thorough examination of the blockchain assets in question and judicial accounting appraisals, it was determined that, as of May 30, 2022, participants in the ‘XX Eagle’ project had deposited a total of 9,762,260.02 USDT, or more than 65 million yuan. Yang and others were fined and sentenced to one to six years in prison by the Chenggong court for creating and running pyramid schemes.