Building a fake blockchain empire, scamming thousands into multi-level marketing

Le Trung Hieu is accused of using four companies as fronts to create the CANVANEX exchange, luring investors into a multi-level marketing scheme and defrauding them of over 100 billion VND.

On 20/7, Hieu (42, residing in Da Nang) was indicted by Thai Nguyen Provincial Police for using computer networks, telecommunication networks, and electronic devices to appropriate property.

Three other individuals were indicted for violating regulations on multi-level marketing business.

According to police, to serve as a front for illegal capital mobilization, Hieu established the following companies: IDEA & STARTUP Technology Group Joint Stock Company (including the IDEA & STARTUP CREATIVE ECO SYSTEM technology startup ecosystem); PGC Investment and Technology Joint Stock Company; Green Tech Group Joint Stock Company (formerly Vzone Global); and Blockchain Education Technology Joint Stock Company. All these businesses were located in An Khanh commune, Hanoi, with Hieu serving as Chairman of the Board of Directors and General Director.

Police taking testimony from Le Trung Hieu. *Photo: Thai Nguyen Police*

Hieu stated that due to a lack of funds for his ecosystem, he devised the CANVANEX project, presented as an investment in "CVX digital currency." He then used the ID.CANVANEX software to attract investment by selling digital share packages in the form of cryptocurrency. With the acquired capital, Hieu purchased equipment, facilities, and numerous properties.

Under the operational structure, Hieu headed the ecosystem. Senior leaders, directly selected by him from qualified individuals, managed regional operations. Locally, Hieu established over 30 PGC companies and signed contracts with the parent company to expand the market.

The lowest tier, named "leaders" or "team leaders" by Hieu, was responsible for developing downstream branches, earning commissions, sales bonuses, and other benefits based on the number of participating investors.

Police determined that Hieu's companies offered various digital share investment packages in the form of CVX cryptocurrency and its variants: CVXM, CVXM2, CVXM201, and CVXM3. The group promised lifetime investment value, profits many tens of times over, and even a 100-fold increase after listing on an international cryptocurrency exchange.

To deceive investors, the group launched the website id.canvanex.com, which mimicked the interface and functions of an international cryptocurrency exchange, and advertised itself as blockchain-powered. However, the transactions were merely internal simulations of a cryptocurrency exchange. The digital assets, introduced by Hieu's group as CVX currency, were in fact worthless and unauthorized for operation or circulation.

A lavish promotional event for the CANVANEX ecosystem. *Photo: Thai Nguyen Police*

To attract investors, Hieu instructed senior leaders to establish legitimate businesses, develop digital products, and apply technology. They also frequently organized grand conferences, seminars, and promotional events. Local PGC companies promoted products and expanded the market through a multi-level marketing business model, earning commissions.

Suspect Nguyen Van Thuong, a senior leader in the system, stated that a team leader would receive a fixed 10% commission for introducing an F1 (first-level recruit). If an F1 introduced an F2 who acquired shares, the team leader would also receive 10%, and the F1 would receive 10%.

This tiered commission structure continued for subsequent levels of recruits. The company claimed these funds were drawn from profits to reward members for inviting investors. However, the company had no actual products and therefore no commercial business or profits.

By the time the case was broken, over 3,000 victims nationwide had invested in Hieu's ecosystem, totaling over 100 billion VND.