CRYPTO IS A PONZI SCHEME BLOCKCHAIN BSN DEVELOPER SAID
Cryptocurrency is a major Ponzi scheme, the Blockchain-based Service Network (BSN) - the developer behind the state-backed blockchain infrastructure - said on Sunday.
Crypto is an old fraud in a new way, Zhiguang Shan, chairman of the BSN Development Alliance, and Yifan He, chief executive officer of BSN Red Date Technology, wrote in a review published in People's Daily Sunday.
Shan and He said many in the industry guarantee high profits to earn money but rely on new members to pay existing investors.
Many crypto projects rely on sales and marketing instead of working as new funds are needed to support the program, the two said.
They also criticize money laundering and gambling projects, calling them fraudulent schemes to steal sensitive information.
Strong comments from BSN reflect the general attitude of Chinese authorities regarding cryptocurrency, which the country closed in September.
The state-run newspaper Economic Daily last week warned of the risk that Bitcoin would fall to zero during the recent market crash.
Last week, financial regulators in Shenzhen said they would "prevent further risks" from crypto trading and that Chinese crypto exchanges operators abroad could face legal action.