A group in Fujian, China organized pyramid schemes under the guise of virtual currency and NFT, but the second instance court rejected their appeal According to BlockBeats, on September 2, 2023, from May to August, Li and others built a hierarchical reward mechanism based on invitation relationships under the guise of issuing a certain virtual currency. They formed groups through social platforms to promote online and offline, and promoted to the public, inducing participants to obtain membership qualifications through purchasing virtual currency, pledging assets, bidding on virtual cards, and receiving rebates based on the number of downlines developed. By October 2023, the organization had developed multiple levels and absorbed funds equivalent to over 20 million yuan. The Procuratorate of Shishi City, Fujian Province has reviewed and determined that although the organization uses emerging concepts such as virtual currency and NFT for packaging, its operating model still complies with the crime of organizing and leading pyramid selling activities stipulated in the Criminal Law of the People's Republic of China. Firstly, the project indirectly sets up a "threshold fee" by purchasing virtual currency, participating in private placement and paying virtual assets, etc., as a prerequisite for joining and developing others; Secondly, establish clear hierarchical relationships and structures, using the number of development personnel and the performance of subordinates as the basis for remuneration and rebates; Thirdly, there is no real business activity or sustainable source of income, and the operation of funds relies on the pre payment income of members' funds, which has obvious characteristics of defrauding property. Li et al. created a false profit by manipulating backend parameters and artificially intervening in the so-called "synthetic probability" and "release mechanism", inducing participants to continuously invest and develop downlines. This constitutes the use of new technological concepts to cover up traditional pyramid scheme crimes, seriously infringing on the property rights of the masses and disrupting economic and social order. In June 2024, the Procuratorate of Shishi City prosecuted the members of the gang in accordance with the law. In December 2024, the court sentenced four defendants in the first instance to imprisonment ranging from six years and six months to three years for organizing and leading pyramid schemes, and imposed fines and recovered illegal gains. After the defendant appealed against the decision, in July 2025, the second instance court ruled to reject the appeal and uphold the original verdict. (Justice Network)