Nguyen Van Luyen, 42, from Phu Tho, and two accomplices, have been indicted and temporarily detained by Hai Phong City Police for violating regulations on multi-level marketing, under Article 217a of the Penal Code.

Investigations revealed that in late 2022, Luyen hired programmers to develop a crypto ecosystem named Token Luxkingtech (LKT) and the website luxkingtech.com. To foster trust, Luyen founded PeaceFul International Trading and Services Joint Stock Company in Hanoi, but appointed a nominee as director.

As crypto is not recognized by Vietnamese law, Luyen opened a representative office in Singapore and hired a representative to list the LKT token on international exchanges. Authorities allege this was done to cultivate an image of a reputable global enterprise, thereby deceiving unsuspecting investors.

Le Van Luyen, the mastermind of the crypto scam. Photo: Police provided

Security agencies determined that Luxkingtech operated as a disguised multi-level marketing scheme. Investors were enticed to purchase financial packages with promises of consistent daily returns. Luyen's group advertised that the LKT token could be used for shopping, travel, and consumption within the company's ecosystem.

In addition to returns on their initial capital, participants were promised high commissions for recruiting new members into the lower tiers. On social media, Luyen's staff frequently posted images showcasing luxurious lifestyles, including high-end cars, beautiful homes, and well-attended events, as a tactic to "lure potential victims."

In reality, Luyen's group manipulated the entire system, from opening investment packages to approving cash flow. The project lacked any real business activities that generated value, instead operating as a Ponzi scheme by using funds from later participants to pay earlier ones.

By the time it was dismantled, the scheme had allegedly drawn in over 1,000 individuals across numerous provinces and cities, with total investments reaching 175 billion dong.

Le Tan