Yunbi Will Freeze Ethereum Withdrawals Linked to a Pyramid Scheme

Ethereum is once again subject to a significant pump across cryptocurrency exchanges. Some believers refer to this development as a natural price increase, even though it looks like there is a more nefarious reason for the latest action. Ethereum has been linked to a pyramid scheme, according to Chinese exchange Yunbi. A very serious allegation that warrants a further investigation.

Ethereum Demand Driven By A Ponzi Scheme?

Claiming Ethereum is used to fuel a global pyramid scheme is a rather bold statement by the Yunbi exchange. According to an official statement, the company has uncovered a correlation between the recent Ethereum price surge and an undisclosed MLM Ponzi scheme. It was to be expected there had to be some reason for the sudden demand for Ethereum, even though no one expected the situation to be this dire.

For the time being, Yunbi plans to freeze ETH withdrawals to suspicious wallet addresses for up to 30 days. It is unclear if the company has identified the MLM Ponzi wallet addresses in question, or if it will subject all ETH withdrawals to increased scrutiny. One thing is certain, the company has plenty of reason to take a closer look at all Ethereum transactions leaving the platform.

It is true Ethereum’s smart contract technology allows pyramid schemes to operate in a somewhat legal matter. Since everyone can see how much money comes in through the smart contract, people can make an educated guess as to whether or not they will see their money back. Schemes like these exist in a limited capacity, though, and should not be the reason for this action by Yunbi. After all, gambling schemes on a smart contract are not necessarily illegal, although they can be considered to be a gray area.

Unfortunately for Ethereum, it is not the first time this alternative cryptocurrency is linked to Ponzi schemes. There is a Medium post about MMM Global showing an interest in Ethereum, although not much came of it in the end. Additionally, there is the SmartPonzi dApp, as well as the 0% fee Ethereum Ponzi on Bitcointalk. However, up until this point, no exchange found it necessary to halt withdrawals to specific addresses. Considering anyone can change their Ethereum deposit address with ease, it is unclear how Yunbi aims to enforce this new rule moving forward. Going over every ETH withdrawal manually seems to be the only course of action, even though it will be a tedious process.

It remains unclear what this news means for the popularity of Ethereum as a whole, though. With very little information to go by, it is hard to predict what will happen next. It does not appear the MLM involvement will do anything to decrease support for Ethereum anytime soon. At the same time, if such a scheme is responsible for the ETH price surge, it would explain a few things. Then again, the price increase can be a natural evolution as well for all we know.

So far, there is only one MLM that could be responsible for Yunbi’s decision. MLM Gateway is openly advertising Ethereum as the next way to get rich quick. Moreover, the program mentions how users can earn daily profits and even make a return of 15%-25% on their investment portfolio. It appears this “advertisement” is linked to ETHtrade, which is a well-known Ponzi scheme dealing with Ethereum.

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