China targets cryptocurrencies in online pyramid scheme crackdown

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(Reuters) – China will crack down on online pyramid schemes, including speculation masked as cryptocurrencies and online games, the public security ministry said on Friday.

The ministry will act jointly with the industrial and commercial department to stamp out pyramid-type schemes, besides punishing those who swindle students and vulnerable groups, the ministry said in a statement on its website.

Chinese regulators have moved to rein in financial risks associated with virtual currency trades and pyramid schemes.

A court this month sentenced two people to life imprisonment for fraud in a pyramid scheme involving 15.6 billion yuan (1.75 billion pounds) that sucked in more than 200,000 people.

Reporting by Hong Kong newsroom; Editing by Clarence Fernandez