Virtual currency suspected of pyramid selling

1. May involve illegal fund-raising and pyramid selling and other related criminal crimes
(1) at present, there is no regulation to regulate the trading platform, but the trading platform should also fulfill the audit obligation. For example, when online trading various network virtual currencies, it should audit whether the currency is a network virtual currency based on blockchain technology
(2) if the trading platform knows that the online trading currency is suspected of MLM, but in order to collect Commission, it also provides trading services for the currency and promotes its development, once the currency is identified as MLM, the trading platform may have to bear certain legal liabilities
(3) at the same time, a large number of customers' funds are stored in the accounts of virtual currency trading institutions. However, all online virtual currency trading institutions are not qualified to absorb public funds, which makes trading institutions face the potential risk of illegal fund-raising
the 2017 version of the guide to the identification of internet pyramid selling (hereinafter referred to as the guide) lists several differences between virtual currency and pyramid selling currency:
(1) from the perspective of issuing mode, virtual currency does not rely on specific monetary institutions, it is a decentralized issuing mode according to specific algorithms; The MLM currency is mainly issued by a certain institution, and the profit is made by pulling the head
(2) from the perspective of transaction mode, virtual currency is a kind of sporadic transaction spontaneously formed by the market. After the scale is formed, the transaction is graally completed by a third party establishing an exchange, while MLM currency is issued by an institution and traded on its own platform
(3) from the perspective of implementation, virtual currency itself is an open source program, while the open source of MLM currency is completely ing other people's open source code, and there is no use of open source code to build programs, which is essentially controlled by the website as Q coin.

2. China has banned these virtual currencies< (2) no organization or indivial is allowed to illegally engage in token issuance and financing activities
from the date of this announcement, all kinds of token issuance and financing activities shall be stopped immediately. Organizations and indivials that have completed the token issuance and financing should make arrangements such as refund, reasonably protect the rights and interests of investors, and properly handle risks. Relevant departments will seriously investigate and deal with the activities of token issuance and financing that refuse to stop and the illegal behaviors in completed token issuance and financing projects< Fifth, the public should be highly alert to the potential risks in the financing and trading of token issuance
there are multiple risks in the financing and trading of token issuance, including the risk of false assets, the risk of business failure, the risk of investment speculation and so on. Investors should bear the investment risk on their own, and hope that the majority of investors will be wary of being cheated
for all kinds of illegal financial activities carried out by using the name of "currency", the public should strengthen the awareness of risk prevention and identification ability, and timely report relevant illegal clues< br />2017-09-04

4. To judge whether it is MLM or not, we need to analyze the legal connotation of this behavior from a legal point of view. If the following conditions are met, it belongs to MLM< According to the "Regulations on the prohibition of pyramid selling":
Article 2, pyramid selling refers to that the organizer or operator's development personnel seek illegal benefits by calculating and paying remuneration to the developed personnel based on their number of directly or indirectly developed personnel or sales performance, or requiring the developed personnel to obtain the qualification of joining in the condition of paying a certain fee, Disturbing economic order and affecting social stability< Article 7 the following acts belong to pyramid selling:
(1) organizers or business operators, through development personnel, require other personnel developed by the developed personnel to join, and calculate and pay remuneration (including material rewards and other economic benefits, the same below) to the developed personnel based on the number of personnel developed directly or indirectly, so as to seek illegal benefits
(2) the organizer or business operator, through the developer, requires the developed person to pay fees or pay fees in disguised form by way of subscribing for commodities, so as to obtain the qualification of joining or developing other persons to join and seek illegal interests
(3) the organizer or business operator, through the development personnel, requests other personnel developed by the development personnel to join, forms the relationship between the upper and lower line, and calculates and pays the online remuneration based on the sales performance of the lower line, so as to seek illegal interests
in the regulations on the prohibition of pyramid schemes, the concept of hierarchical relationship is repeatedly mentioned. The hierarchical relationship formed by certain rules is only a phenomenon in many pyramid schemes. It must be related to the illegal possession of other people's property before it can be suspected of pyramid schemes.

5. The Ministry of public security is not fighting, but has been trying to fight. But China is so big that it's hard to ban pyramid selling at home. The four ministries and commissions of Huzhu finance have issued risk tips, but there are still a lot of people playing, resulting in heavy losses. Police around the country also reported that a number of digital money pyramid schemes have been destroyed
of course, virtual currencies are not all pyramid schemes, such as bitcoin, lightcoin, decent and so on.

6. Whether a company is engaged in pyramid selling needs to be determined by the administrative organ or the judicial department according to the specific situation. If the company's behavior meets the following conditions, it belongs to pyramid selling
Article 224-1 of the criminal law: organizations and leaders, in the name of business activities such as selling goods and providing services, require participants to obtain the qualification of joining by paying fees or purchasing goods and services, and form a hierarchy according to a certain order, and directly or indirectly use the number of development personnel as the basis for remuneration or rebate, so as to lure and encourage the participants Coercing participants to continue to develop pyramid selling activities in which others participate, defraud property and disrupt economic and social order< According to Article 7 of the regulations on the prohibition of pyramid selling, the following acts belong to pyramid selling:
(1) organizers or business operators, through developing personnel, require other personnel developed by the developed personnel to join, and calculate and pay remuneration (including material rewards and other economic benefits, the same below) to the developed personnel based on the number of personnel developed directly or indirectly, Seeking illegal interests
(2) the organizer or business operator, through the developer, requires the developed person to pay fees or pay fees in disguised form by way of subscribing for commodities, so as to obtain the qualification of joining or developing other persons to join and seek illegal interests
(3) the organizer or business operator, through the development personnel, requests other personnel developed by the development personnel to join, forms the relationship between the upper and lower line, and calculates and pays the online remuneration based on the sales performance of the lower line, so as to seek illegal interests
in the regulations on the prohibition of pyramid schemes, the concept of hierarchical relationship is repeatedly mentioned. The hierarchical relationship formed by certain rules is only a phenomenon in many pyramid schemes. It must be related to the illegal possession of other people's property before it can be suspected of pyramid schemes.

7. The business model of virtual currency is the same as that of MLM, and bitcoin is the most famous virtual currency
however, the attitude of regulators is clear. Whether it is genuine bitcoin, or a variety of derivative Shanzhai coins, there is no way to obtain legal living space at present. This is something we need to be clear about. If the platform goes out of business or the staff runs away, it is very likely that they will lose all their money and the losses they have suffered will not be protected by law
the promises they give you often make the participants pay money quickly. Behind them is the Ponzi scheme of "robbing the east to pay the west" + "cheating the white wolf with empty hands". They use the money of new investors to pay interest and short-term return to old investors, so as to create the illusion of making money and cheat more investment. When no new investors enter, the return of old investors collapses one after another, and it is often difficult to withdraw cash, or the website cannot be opened
in short, although the external form of virtual currency is ever-changing, it is not divorced from its essence of pyramid selling. The more investors put in, the greater the final loss, and the more serious the loss may be.

8. Belong to MLM, no profit, only loss. According to news reports: at present, a new online pyramid selling mode - "markcoin" is spreading throughout the city. The organization has set up a number of wechat groups, and each group is known as a team. Please do not be fooled
"mark coin" is an upgraded version of "bitcoin". It is a kind of virtual currency and has high value-added in external publicity. Its main mode is: Online introctions and offline participation are required, and each offline will provide its name, e-mail address and mobile phone number to online users, who will help to register. After successful account registration, transfer the corresponding level of money to the company's designated account. Then everyone will give an account and password to log on to the website, and the backstage can see everyone's investment amount and dividend details. On January 18 this year, the company held a meeting in Macao, and most of the participants were Chinese
"markcoin" is similar to some other online pyramid schemes. It is said that the investment is small and the income is high. Although there is a static bonus, if there is any real income, it needs to obtain dynamic awards such as sales award, collision award and algebra award, and to obtain these dynamic awards, it must develop a large number of offline procts
according to the police, at present, there are not only "mark coin" and "bitcoin", but also "black tea", "Baichuan coin", "dark coin", "3M", "carat coin", "petroleum coin", "Huaqiang coin", "U coin", "Morgan coin", "Fuda compound wealth management", "WorldCom", "21st Century Fox" and "Wanxi wealth management". The target of lawbreakers' development is Internet users who are keen on surfing the Internet. The target of lawbreakers' development is graally infiltrating from young people to middle-aged people and unemployed people, luring them to invest in small, big returns and wait for high returns. In fact, the so-called static dividend is just a cover. Many people continue to develop offline in order to earn benefits, which is no different from the traditional pyramid scheme. Moreover, the running cycle of this kind of MLM is short, generally less than a year. When it comes to the rebate peak, the website will be closed directly, causing many people to lose their money.

9. It is impossible to judge whether it is pyramid selling only by a trade name or a proct name. To judge whether it is MLM or not, we need to analyze the legal connotation of this behavior from a legal point of view. If the following conditions are met, it belongs to MLM< According to the "Regulations on the prohibition of pyramid selling":
Article 2, pyramid selling refers to that the organizer or operator's development personnel seek illegal benefits by calculating and paying remuneration to the developed personnel based on their number of directly or indirectly developed personnel or sales performance, or requiring the developed personnel to obtain the qualification of joining in the condition of paying a certain fee, Disturbing economic order and affecting social stability< Article 7 the following acts belong to pyramid selling:
(1) organizers or business operators, through development personnel, require other personnel developed by the development personnel to join in, and calculate and pay rewards (including material rewards and other economic benefits, the same below) to the development personnel based on the number of personnel developed directly or indirectly, so as to seek illegal benefits
(2) the organizer or business operator, through the developer, requires the developed person to pay fees or pay fees in disguised form by way of subscribing for commodities, so as to obtain the qualification of joining or developing other persons to join and seek illegal interests
(3) the organizer or business operator, through the development personnel, requests other personnel developed by the development personnel to join, forms the relationship between the upper and lower line, and calculates and pays the online remuneration based on the sales performance of the lower line, so as to seek illegal interests
in the regulations on the prohibition of pyramid schemes, the concept of hierarchical relationship is repeatedly mentioned. The hierarchical relationship formed by certain rules is only a phenomenon in many pyramid schemes. It must be related to the illegal possession of other people's property before it can be suspected of pyramid schemes.