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 <h2 id="strong-how-did-it-happen-strong"><strong>How Did It Happen?</strong></h2> 
 <p><span style="font-weight: 400;">According to a local </span><span style="font-weight: 400;">report</span><span style="font-weight: 400;">, Lai Mouhang and Lai Moujun established Shenzhen Space-Time Cloud Technology in 2018 and later recruited defendants Hu and Liang. Sometime in 2019, Lai Mouhang reportedly created a Chinese community website and a WeChat public account.&nbsp;</span></p>  
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 <p><span style="font-weight: 400;">The prosecution asserted that through these platforms, the defendants extensively promoted and exaggerated the investment potential of </span><span style="font-weight: 400;">distributed ledger technology (DLT)</span><span style="font-weight: 400;">. Alongside, they promoted the economic model of Filecoin, which hinges on a block reward system. This mechanism supposedly granted </span><span style="font-weight: 400;">Filecoin tokens</span><span style="font-weight: 400;"> to miners who successfully unearth new blocks.</span></p> 
 <blockquote> 
  <p><span style="font-weight: 400;">Subsequently, the accused purportedly designed a model imitating the economic structure of Filecoin. In particular, they created the Filpool platform under Space-Time Cloud Company.&nbsp;</span></p> 
 </blockquote> 
 <p><span style="font-weight: 400;">According to the report, they operated under the guise of selling storage servers, cloud computing power, and other packages. The defendants allegedly enticed participants to invest by promising various benefits, including static income and development opportunities.&nbsp;</span></p>  
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 <h2 id="strong-mlm-activities-strong"><strong>MLM Activities?</strong></h2>  
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 <p><span style="font-weight: 400;">The scheme purportedly revolved around joint mining, promising increased income for greater investments and expanded downline development. </span><span style="font-weight: 400;">Furthermore, the prosecution contends that Space-Time Cloud Company introduced another platform in 2021, using a partner-model approach to facilitate multi-level marketing (MLM) activities.&nbsp;</span></p> 
 <blockquote> 
  <p><span style="font-weight: 400;">By 2022,&nbsp; the Filpool platform had reportedly attracted 57,122 members across 16 levels, generating substantial revenue from the sale of cryptocurrencies. Similarly, the BPool platform was said to have garnered 37,015 members over 11 levels.</span></p> 
 </blockquote> 
 <p><span style="font-weight: 400;">The prosecution agency asserts that the defendants engaged in fraudulent activities that disrupted economic and social order. It added that they defrauded individuals and violated criminal laws by enticing participants with the prospect of lucrative returns. Additionally, it noted that they exploited a hierarchical rebate system based on recruitment.&nbsp;</span></p> 
 <p><span style="font-weight: 400;">In light of the seriousness of the situation, the Chinese prosecution recommends a thorough investigation into the criminal liability of Lai Mouhang and his associates.</span></p> 
</div>

Chinese Court Charges 5 People in Filecoin Based Fraud Pyramid Scheme

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