The Beijing Municipal Public Security Bureau Economic Crimes Investigation Detachment announced on September 9th that they had recently busted a gang that used investment in virtual collectibles as a front for organizing and leading pyramid schemes. The case involved over 100 participants and an estimated $2.8 million USD in losses. Police warn that any activity that requires an "entry fee" under the guise of investment, encourages recruiting new members, and rewards based on the number of people recruited is a disguised form of pyramid scheme. The public should be aware of the nature of pyramid schemes and raise their vigilance.

According to police investigations, the pyramid scheme organization used in-person lectures and WeChat group messages to introduce its "game rules" to the public. They lured unsuspecting individuals into investing in virtual collectibles, encouraging them to make deposits and earn profits, resulting in financial losses for many. After analyzing city-wide reports, police concluded that the investment project was suspected of being involved in organized, leadership-driven pyramid scheme crimes.

Investigations revealed that the organization had a complete membership registration system with both dynamic and static dividend models. Participants, after making deposits, used virtual currencies for settlement and earned "static dividends". Additionally, members could earn "dynamic dividends" by recruiting new members through the "headhunting" method.

Police warn that some criminals have turned "digital collectibles" and "virtual currencies" into their "wealth code," using the concept and technology of the digital economy as a disguise to engage in illegal fundraising and other criminal activities. They attract investment and defraud money by exaggerating the value or creating worthless "fake currencies." The public should be vigilant and avoid falling victim to such scams.