Another well-known Cryptocurrency company executive arrested for qualitative MLM

On November 6, the official website of Xuzhou Public Security Bureau issued a document “Xuzhou Police’s “2021 Hanfeng 3″ Severe Crackdown and Rectification Unified Action, 288 Cases Uncovered in 48 Hours”, which aroused concern. the Star Alliance network pyramid scheme arrested gang members 31 people, seized Ethernet Square , TEDA coins, FIL coins and other virtual currency worth approximately RMB 400 million yuan. “

The reporter of “China Times” contacted Fang Jun, chairman of Star Alliance as soon as possible. Relevant persons revealed to reporters that the arrest took place on November 4 and it was the police of Minhang District, Shanghai who assisted the Fengxian Public Security Bureau in the arrest.

Qualitative MLM

According to the official website of the Xuzhou Public Security Bureau, the operation is to consolidate and deepen the results of the earlier “Hanfeng Operation”, and severely crack down on outstanding crimes and public security issues in autumn and winter. The city’s public security organs organized and carried out a centralized and unified operation of crackdown and rectification code-named “2021 Hanfeng No. 3”.

The reporter noticed that on November 5, an announcement issued by the Star Alliance stated that “Recently, our company received a notice from the Public Security Bureau of Xuzhou City, Jiangsu Province to assist it in investigating a case. Because the suspect in this case paid our company’s procurement The funds are suspected to be obtained illegally. Therefore, at the request of the police, we have temporarily handed over the relevant technical account and authority to the police, and will return to normal after the investigation is completed.”

On November 6, before the police issued the announcement, the Star Alliance also issued an announcement stating: “The media has over-interpreted the situation of Star Alliance’s cooperation with the Xuzhou police in investigating related cases, and has communicated with some media and clarified relevant facts.”

On November 6, the Xuzhou Public Security Bureau issued a message that the activities of the Star Alliance were classified as criminal activities of network pyramid schemes. Fengxian County Bureau successively arrested 31 members of the Star Alliance network pyramid schemes in Shanghai, Wuhan, Shenzhen and other places, and seized Ethereum. , TEDA coins, FIL coins and other virtual currencies are worth about 400 million yuan.

“The Interstellar Alliance’s announcement may hope to stabilize its investors. I did not expect the police to issue an announcement on November 6. Their office is currently closed, and there is a sticker on it, “Company employees work from home, if you have anything, please call customer service.” The note.” Its investor Mr. Liu told reporters.

The reporter dialed the number publicized on the Star Alliance official website, but failed to get through many times. The reporter then received the “Thank you for calling Distributed Storage Interstellar Alliance, company address: 3rd and 7th Floor, Building T6, No. 3299, Caobao Road, Minhang District, Shanghai” SMS message.

The reporter consulted its customer service on the Star Alliance website and also received a reminder that “there is currently no customer service online”.

According to some investors broke the news, some of the Star Alliance staff who have not been arrested also promoted in their social groups “Unity! Unify to the outside world! Not induced! Seek truth from facts! Everyone’s own food is managed so hard, and they can’t be Take away the unnecessarily hat!”

According to its official website, Star Alliance’s headquarters are located in Room 301, Building T6, Lane 331, Xinlong Road, Minhang District, Shanghai, and 10th Floor, Building T2, Lane 500, Xinlong Road, Minhang District, Shanghai. Has more than 200 IDC data center resources.

Investor losses are hard to recover

From the perspective of Star Alliance’s business model, assume that two 96T mining machines are self-packaged. The initial investment is 1032FIL, the total investment is 1919.6FIL, the payback period is 152 days, and the mining will get 10573.82FIL for three years. The reporter learned that as of the date of posting the virtual currency FIL price is $62. The investment in the Fil distributed storage project generally involves business activities such as selling equipment, packaging and producing currency.

Why is Star Alliance being targeted MLM? Liu Yang, a consultant and lawyer at Beijing DeHeng Law Firm, analyzed to this reporter: “The Star Alliance is mainly engaged in the FIL mining business. The FIL mining model has obvious essential characteristics of holding currency to earn interest and borrowing the new to repay the old. First of all. , FIL mining needs to pledge FIL tokens, that is, if investors want to participate in mining, in addition to purchasing mining machines and computing power, they also need to purchase FIL tokens to pledge to the project node. Secondly, the pledged FIL tokens need 540 The lock-up period of days, this lock-up period is relatively long, after the expiration, the FIL obtained by mining is not released at once, but released in stages over a longer period of time. Finally, the sales model of FIL mining machines It is its biggest problem. In addition to mining to obtain tokens, mining machine sellers often take the development of heads as the evaluation basis, adopt a team compensation model, and use the so-called community such as WeChat groups and telegram groups to quickly spread, attracting a large number of Anyone with experience in virtual currency investment will enter the market to participate.”

How to qualify MLM in the “Opinions on Several Issues Concerning the Application of Law in Handling Criminal Cases of Organizing and Leading MLM Activities” jointly issued by the Supreme People’s Court, the Supreme People’s Procuratorate, and the Ministry of Public Security? Liu Yang pointed out that in the name of business activities such as promoting goods and providing services, participants are required to obtain membership qualifications by paying fees or purchasing goods and services, and form a hierarchy in a certain order, directly or indirectly based on the number of developers. Or the rebate basis, which induces or coerces participants to continue to develop others to participate, defrauds property, disrupts the economic and social order of the MLM organization, the organization’s internal MLM activities have more than 30 people and the level is above the third level, the organizer, The leader holds criminal responsibility.

Liu Yang further analyzed that the vast majority of people, including FIL project parties, mining machine dealers, and investors, believe that FIL mining does not return investors’ pledged coins as profits to investors in stages, and investors’ income It comes from the newly generated FIL tokens, and the pledged FIL tokens only serve as a “margin”. This model does not belong to “borrowing the new to return the old”. Essentially, the value of FIL tokens is based on all the funds invested by investors. The additional issuance of FIL tokens will inevitably lead to a decline in the value of a single currency. In order to maintain the single currency price of FIL tokens, investors can only continue to attract investors to enter the market. Enlarge the capital market and use the so-called lock-up mechanism to delay the thunder cycle.

From this perspective, the MLM behavior of Star Alliance is very obvious.

Since the beginning of this year, my country has continued to severely crack down on virtual currency mining and trading. On September 24, ten departments including the People’s Bank of China and the Ministry of Public Security issued the “Notice on Further Preventing and Disposing of the Risk of Hype in Virtual Currency Transactions” (hereinafter referred to as the “Notice”), which mentioned that multiple related acts were classified as illegal and criminal acts.

The “Notice” pointed out that once clues to illegal financial activities related to virtual currencies are discovered, the local financial supervision department, together with the branches of the financial management department of the State Council and other relevant departments, will promptly investigate and identify in accordance with the law, properly dispose of them, and seriously pursue relevant legal persons, unincorporated organizations and natural persons. The legal responsibility of the law; if a crime is involved, it shall be transferred to the judicial organ for investigation and punishment in accordance with the law. All departments and regions will always maintain a high-pressure situation, dynamically monitor and deal with related risks in a timely manner, resolutely curb the hype in virtual currency transactions, and severely crack down on illegal financial activities and illegal criminal activities related to virtual currencies.

Previously, Zhejiang and Jiangsu had just investigated and dealt with thousands of virtual currency mining IPs and dozens of units suspected of using public resources to engage in mining, investigated and dealt with a group of offenders, and pursued the illegal proceeds.

At present, whether it is traditional mining machine mining or distributed storage mining in virtual currency mining, or virtual currency trading, it has become the target of my country’s strict crackdown, and investors must invest rationally.

After Star Alliance’s business activities are qualitatively criminalized by pyramid schemes, it will be difficult for investors to recover their losses. Liu Yang analyzed to reporters: “In the case of organizing and leading pyramid schemes, investors are not victims in the sense of criminal law, but participants in fund-raising. At the same time, in accordance with Article 25 of the newly promulgated “Regulations on Prevention and Handling of Illegal Fund-raising” It is stipulated that the losses incurred by participating in the illegal fund-raising shall be borne by the fund-raising participants themselves. Therefore, in relevant cases, the relevant illegal income is usually recovered and turned over to the state treasury in accordance with the law.”

In addition, the “Notice” emphasizes that any person who invests in virtual currency and related derivatives shall bear the losses caused by it; those suspected of disrupting financial order or endangering financial security shall be investigated and dealt with by relevant departments in accordance with the law.

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