Cloud Token Revealed to Be a Ponzi Scheme by Chinese Police

Ponzi schemes have been around for years, even before the cryptocurrency industry became a reality. Unfortunately, bad players in the industry have made them more prevalent, and consumers have been investing in one project that has been revealed as a scam – the Cloud Token.

  • The Cloud token is supposed to be an e-wallet with dividend payments.
  • Over 70 suspects have been arrested by Chinese police.

The cryptocurrency industry has gotten a bad reputation through the years for the scams that have plagued it, and another one has recently been added to the ranks. In the same way that BitConnect and Plus Token were discovered to be Ponzi schemes, so has the Cloud Token according to a report and AZC News. But what exactly is it?

Cloud Token was set to be an e-wallet, making it the first one in the world to host every single cryptocurrency on the same blockchain network. The goal advertised to consumers was to develop an ecosystem that has one of the most advanced blockchains around, and the mobile payment system was set to be done entirely through the Cloud Token wallet.

The multi-level marketing technique of the Cloud Token is the giveaway, requiring a high referral fee to get involved. With BitConnect, hodlers get paid dividends, while Plus token is a wallet for dividend payments that are based on a token holding rate. If the project of the Cloud Token follows along with similar structures, they may be on their way to failure too.

The Cloud Token works in much of the same way that the Plus token did, saying that the number of tokens held by the user will determine the dividends paid. However, unlike some schemes, this project specifically zeroes in on the markets in China and Korea.

Based on reports from China, the local police have managed to crack the Ponzi scheme. In the process, the authorities have already arrested over 70 suspects and discovered a theft of $4 million.

While the website is still functioning normally, it seems that the withdrawals started to slow and ultimately stop by November 2019. There’s no information on whether these users are going to be seeing a refund. Still, if this project takes the same path as the scheme before it, the fake executives may be trying to take off with the funds.

Cryptocurrency continues to be a difficult place for consumers to navigate, and the bad actors aren’t making the circumstances any easier. While there are plenty of ways to carefully preserve crypto assets, consumers may want to prioritize staying away from platforms with high referral fees and the promise of dividend payments – they don’t seem to be following through as anticipated.

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Krystle M
Krystle is an American cryptocurrency blogger that wants to see the future of crypto and blockchain technology evolve. She has been writing about cryptocurrency for about a year, with a special interest in blockchain technology and regulatory measures around the world. While away from writing and learning about the changes in the cryptocurrency industry, she likes to indulge in science fiction novels and further her experience in playing both guitar and piano.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer

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