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The Filecoin token’s (FIL) price has fallen nearly 4% in the last 24 hours, as its largest firm came under police investigation in China.
Lai Chuhang, the boss of Shikongyun- Filecoin’s largest firm, has been arrested by the Guangxi police on suspicion of fraud and organizing a pyramid scheme.
In November, several Chinese Filecoin companies were under investigation by the police for running pyramid schemes and FIL mining scams. The police arrested nearly 3o people involved in the scam and seized more than $50 million.
China Continues Crackdown on Filecoin Companies
Chinese companies operating Filecoin mining pools have been under police investigation due to suspected pyramid schemes. During the initial Filecoin launch several agents ran pyramid schemes to increase participation in the project. In 2019, Chinese media reported that a pyramid scheme had raised about $300 million.
Shikongyun is one of the largest companies running the largest Filecoin mining pool ‘Space-Time Cloud.’ The technical account and authority have been transferred to the police and services will resume after the completion of the investigation.
