With a crackdown on gambling amid the FIFA World Cup, authorities in China have seized over $1.5 million in digital currency. Police started an investigation into the unnamed gambling site after ads said that the platform would “accept international recognized cryptocurrencies, including bitcoin, Ether and Litecoin,”
Different from other gambling sites, its profitability model set up a multi-tier pyramid-scheme that encourages staff (or “agents” as they call them internally) to bring in members which can increase commission and membership fee gains, and to acquire more cryptocurrency to hedge the platform’s loss risks by leveraging coin prices and other crypto-financial features.
It attracted more than 300,000 players from different countries, and 8,000 “agents” who earned commissions for recruiting new members through a pyramid scheme-like system
World Cup gambling is big worldwide — but China’s been cracking down on it. Most forms of gambling are illegal across almost the entire country, outside of two officially sanctioned lotteries.
The police action was not random. It is part of the provincial police Project 9 from the special police action series Clean and Secure Net 2018 (????). Project 9 targets online gambling cases during the World Cup period.
According to Guangdong police, the task force had arrested a total of 540 suspects from over 20 gambling rings, and frozen 260 million yuan ($39M USD) related to the criminal activities. The task force also shut down 70 websites and apps, as well as 250 online chatting groups.
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