PEOPLE ARE RELATIVELY FAMILIAR with traditional pyramid schemes that put more importance on recruiting new members than selling actual products. But the internet and blockchain have given a shot in the arm to the scam, as swindlers have created virtual currency pyramid selling to dress up their old tricks. ThePaper.cn comments on Wednesday:

It is reported that since 2014, 337 people have been sentenced for crimes relating to 60 kinds of virtual currency. The fraudsters sold self-made virtual currencies through pyramid schemes that swindled thousands of victims out of at least 10 billion yuan ($1.56 billion).

Some local authorities were misled into believing that the virtual currencies represented the new economy.

Notably, many of the convicted criminals were well educated, including engineers and even university professors. And the management of their gangs is professional and efficient. Their network spreads nationwide, and there is clear responsibility and income distribution among them.

Sometimes, if the network cannot be rooted out completely, the remaining parts will soon grow into new networks.

It is necessary for the authorities to draw lessons from these cases and to raise awareness of these internet-based schemes.

The development of information technology has always been double-edged. The public security departments need to think more about how to make the best use of its advantages to take preemptive actions to spot and investigate internet scams, because as the cases indicate even if the criminals receive their due legal penalty, the considerable losses of the victims can never be recovered.