The public security ministry of China said on Friday that it would be targeting pyramid schemes in the country.
This includes firms in China that reportedly are involved in dealing with various cryptocurrencies.
In a statement made on January 19, the Ministry of Public Security revealed its plan to bear down on pyramid scams, or financial schemes wherein participants are driven to sell some kind of product while also soliciting others to create sales networks of their own.
Some of the notorious digital currency pyramid schemes include OneCoin, which as reported is the target of an international, multi-agency crackdown.
The ministry said in a translated statement:
“The public security organs and industrial and commercial departments of the country will continue to carry out special rectification in key areas and concentrate on destroying the pyramid selling organizational system, severely punishing the members of the pyramid selling field, annihilate and destroy the network pyramid selling and criminal activities, [and] earnestly safeguard the legitimate rights and interests of the general public as well as the economic and financial order.
“The public security organs and industrial and commercial departments of the country will continue to carry out special rectification in key areas, concentrate on destroying the pyramid selling organizational system, severely punishing the members of the pyramid selling field, annihilate and destroy the network pyramid selling and criminal activities, earnestly safeguard the legitimate rights and interests of the general public as well as the economic and financial Order, better service economy and society sustained and healthy development.”
The statement doesn’t outline to what degree it will concentrate on schemes that involve a cryptocurrency, versus pyramid schemes involving other types of products.
That said, the mention marks that officials would scrutinize some of the schemes involved. In the past, scams such as Gemcoin have led to thousands of Chinese citizens being defrauded, and OneCoin has been known to have a presence in China as well.
It also remains to be seen whether China would move toward more demanding edicts, as shown in the case of the ICO ban last year.
As reported at the time, officials in China barred the blockchain funding model, calling an illegal form of fundraising.
