In China detained more than 20 people because of a financial pyramid for $7.6 billion


Moscow. February 1. Chinese police have arrested 21 people associated with the company Ezubo Ltd., on suspicion in financial frauds for the sum more than 50 billion yuan ($7.6 billion), reports the BBC.

Investment company Ezubao provided credit services to individuals and investment products with returns far exceeding the market average.

According to the authorities, this activity was actually a pyramid scheme, because 95% of investment projects presented on the website of the company, were counterfeit, and the company was paying old debts with new loans.

The website began to work in July 2014 and has quickly become one of the largest financial platforms in China. The company became casualties, according to police estimates, more than 900 thousand private investors.

Currently in China there are over 2.5 thousand platforms for lending between individuals, and for the last two years, the volume provided by such companies loans jumped 14 times to $66,8 billion.