Chinese law enforcement has seized some altcoin projects worth 400 million yuan (about $62.5 million) in a crackdown on a Ponzi scheme alleged to be a Filecoin miner. For details of the news cryptocoin.com keep reading.
In the ponzi operation, some altcoin projects were seized
Xuzhou city police have arrested 31 people in several cities, including Shanghai, Wuhan and Shenzhen, for allegedly running Ponzi schemes linked to Shanghai-based Filecoin miner IPFUnion. However, it is not yet clear whether they belong to IPFUnion or the respective distributor. Local police confiscated crypto assets including altcoin projects Ethereum (ETH), Tether (USDT) and Filecoin (FIL) after the raid.
IPFUnion said on Friday that the suspects purchased the equipment with allegedly illegal money and were assisting police in the investigation. As a result, the company now limited the number of miners in its data centers to the amount allowed by the police, and everything was restored only after the investigation was over.
Last minute: 31 people from Star Alliance, one of the largest Filecoin companies in the world, were arrested by local police. The seized FIL and other cryptocurrencies were valued at US$80 million. MLM is suspected as the reason for the operation
IPFUnion is known as one of the top 10 Filecoin miners in terms of total effective storage capacity and also sells miners and computing power to end users either directly or through distributors.
It remains unclear whether IPFUnion was accused of directly engaging in a Ponzi scheme or knowingly allowing its distributors to oversell non-existent devices. But Filecoin-based Ponzi schemes have become commonplace in China since 2018 after Protocol Labs raised $200 million in an ICO 2017.
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