- Shikongyun sold nearly $100 million in a financial pyramid scheme, local media reported.
- After the incident, all Filecoin units are under scrutiny by Chinese police.
The Pingnan District Prosecutor’s Office is investigating Filecoin subsidiary Shenzhen Space and Time Cloud Technology Company for selling FIL coins, local publication Weixin reported. The organization allegedly made $100 million in illegal profits through a financial pyramid scheme.
The Pingnan County People’s Court held a public hearing in Guigang City. Lai Mouhang and four others were prosecuted in the case for directing and organizing communication activities, local media reported.
According to prosecutors, in June 2018, Lai Mouhang and Lai Moujun founded a company called Shenzhen SpaceTime Cloud Technology Co.
They and accomplices later used a platform to mine FIL tokens and recruited other users to do so. They offered participants to buy or rent mining equipment.
The court said the defendants set the amount of remuneration depending on the number of referrals, lured participants with lucrative profits, thereby violating economic and social order.
Local media also reported that almost all Filecoin-owned companies in China are now under investigation by law enforcement.
With the news, the FIL coin has not made any significant moves, with the token’s price down about 1.5 percent in the past 24 hours, according to Coinmarketcap.
Remember, in May, the U.S. Securities and Exchange Commission labeled the FIL token a security.
The FIL token was named a security by the U.S. Securities and Exchange Commission.