A Chinese Filecoin (FIL) mining firm is currently facing legal charges from Chinese authorities over accusations of operating an $83 million pyramid scheme.
As indicated by a recent post on social media, the regional court situated in Pingnan county within the Guangxi autonomous region has initiated criminal proceedings against Shenzhen Shikongyun Technology, one of China’s major Filecoin mining enterprises, along with its four top executives.
The prosecutors claim that the company employed tactics of inflating the potential profits associated with their technology in order to attract investors to engage in Filecoin mining on the company’s platforms.
To participate in their mining activities, the company purportedly obliged new participants to make payments for the acquisition or rental of mining machinery.
According to the post, the prosecutors assert that the company established a website and an official WeChat account to publicize these operations, as well as the platforms filpool.io and bpool.io.
The company reportedly gathered an approximate total of 100,000 members between the period of February 2021 and May 2022, during which they accumulated 606.95 million yuan ($83.3 million), according to the allegations.
China had imposed a ban on all cryptocurrency transactions within its mainland in September 2021. In contrast, the neighboring region of Hong Kong has been more receptive to cryptocurrencies.
Filecoin was introduced in 2020 as a decentralized service for sharing and storing files, aimed at providing dependable solutions for long-term storage needs and competitive pricing for storage.
As of the time of writing, Filecoin is being traded at $3.80, reflecting a 5.4% decrease in value within the past 24 hours.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.