Heilongjiang police have cracked a cryptocurrency mining machine pyramid scheme involving 300 million yuan and more than 3 million members.
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Heilongjiang police have cracked a cryptocurrency mining machine pyramid scheme involving 300 million yuan and more than 3 million members.
Arrested 28 members of a criminal gang led by top ringleader Zhao and second-in-command Su, froze over 280 million yuan in illicit funds, 14 luxury vehicles, and some real estate properties, with a total value of nearly 300 million yuan.
Navigating Web3 tides with focused insightsOriginal title: "300 Million Yuan! Heilongjiang Police Crack Virtual Currency Mining Machine Pyramid Scheme Involving Over 3 Million Members"
Source: Sina Finance
In September 2020, the Xiangyang Branch of Hegang Municipal Public Security Bureau in Heilongjiang Province, with support from multiple departments including the city's Criminal Investigation Brigade and Cybersecurity Brigade, successfully cracked a major online pyramid scheme case using virtual currency mining as a front. The operation led to the arrest of 28 members of the criminal gang headed by primary suspect Zhao and secondary suspect Su, freezing over 280 million yuan in illicit funds, 14 luxury vehicles, and some real estate properties, totaling nearly 300 million yuan in seized assets.
According to reports, in July 2020, police in Hegang City received a lead on the "Columbus CAT virtual currency" criminal activity. Further analysis revealed that core members of the "Columbus" organization were operating within Hegang, which became the starting point for uncovering a nationwide network structure.
Investigations showed that "Columbus" was a platform developed under the guise of blockchain technology, promoting company-owned "mining machines" for cryptocurrency mining. The group falsely claimed international recognition and state support, promising that the mined CAT coins would freely circulate in the market with strong appreciation potential. They lured members by offering increased mining speeds and bonus virtual currency for recruiting others, thereby encouraging more people to purchase mining equipment and pay membership fees. The organization had regional branches across all provinces and cities in China, with key members posting photos online of themselves standing in front of provincial government buildings and public security departments, falsely claiming official endorsement. The "Columbus" group amassed over 3 million members nationwide and conducted large-scale promotion through internet media and WeChat groups.
Through investigation of the core group in Hegang, police identified Song as a ringleader. Further analysis of higher-level members exposed Ma as the head in Heilongjiang Province, Weng as the North China regional leader, and Zhao as the central organization leader, along with multiple骨干 members.
Following field investigations, a special task force deployed more than 70 officers to conduct simultaneous arrests in Hefei, Chengdu, Harbin, and other locations. As a result, this massive nationwide virtual currency pyramid scheme network was completely dismantled. The case is currently undergoing further legal proceedings.
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