A recent whistleblower report to Time Finance alleges the collapse of a blockchain-based Ponzi scheme known as "Silicon Valley Block Chicken." The operators have reportedly fled, the associated app is inaccessible, and numerous investors have lost principal amounts ranging from hundreds of thousands to millions of RMB. Some investors estimate the total funds involved in "Silicon Valley Block Chicken" and related schemes could be as high as 10 billion RMB.
The scheme was operated by Liaoning Haoyang Technology Co., Ltd. ("Haoyang Technology"), whose actual controller is Guan Xin. Guan Xin has now been listed as a discredited debtor by the Lianshan District People's Court in Huludao City, Liaoning. Time Finance's attempts to contact Haoyang Technology, Guan Xin, and related personnel have gone unanswered.
While blockchain technology—a decentralized, immutable, and transparent data management system—holds significant promise, its complex nature can make it seem abstract. In recent years, this has allowed criminals to exploit the "blockchain" buzzword to cloak projects involving illegal fundraising and fraud.
Invest 30,000 RMB, Earn 10,000 RMB a Month?
Liu Bing (a pseudonym), an investor from Shandong, told Time Finance that a colleague introduced him to the "Silicon Valley Block Chicken" app in July 2019. The colleague claimed to have turned a 30,000 RMB investment into over 10,000 RMB in profit within a month. Lured by the high returns, Liu Bing decided to invest.
The platform's model required users to purchase virtual "block chickens." Each type had a different price and yield—for example, 13% over 7 days or 15% over 11 days. Prices were based on the platform's displayed "real-time" transaction values.
In simple terms, after "raising" a chicken in your account for the set period, another user on the platform was supposed to buy it from you at the original price plus the accrued profit, with payment made via peer-to-peer transfer—offering returns far beyond normal market rates.
Initially, the scheme worked, and Liu Bing received payments. By August 2019, he had invested over 80,000 RMB. Then, the platform suddenly halted operations, blaming a "hacker attack." Liu Bing could no longer access his principal or earnings, left hoping for a restart.
The platform eventually came back online with new rules: to sell a chicken, you first had to "grab" another one of the same tier. It also began pushing user recruitment. In September, likely due to a saturated market, it launched a new product called "Block Egg," which operated on a similar model.
Selling chickens and eggs became increasingly difficult. After several more suspensions, the app went completely offline in January of this year, and all associated WeChat groups were disbanded. Officials promised a restart on February 3rd, but the platform remains inactive.
Liu Bing said that from August 2019 to January, he poured more money into the platform in a desperate attempt to recover his initial investment, enticed by continued promises. His total investment exceeded 200,000 RMB. Had the platform continued operating, his account balance would have shown nearly 400,000 RMB.
A Copycat of "Huadeng Block Dog"?
"Silicon Valley Block Chicken" bears a striking resemblance in both mechanics and collapse to the infamous "Huadeng Block Dog" scheme.
A September 2019 Red Star News report detailed the case of Yu Tian from Jiangxi. After an initial successful trade on "Huadeng Block Dog" in July 2019, he invested more time and money into "grabbing," "raising," and "selling" virtual dogs.
The platform offered five breeds priced from 100 to 15,000 RMB. Users would pay a deposit to "adopt" a dog after a reservation match, hold it for a set period, and then sell it for a return.
The yields were even more outrageous than "Block Chicken," with some promises as high as 40% daily for a 20-day hold.
A multi-level marketing component offered commissions: 8% for direct referrals and 3% for second-tier referrals. Recruiting 15 people earned a 3,000 RMB bonus and a "Promotion Ambassador" title with higher rewards.
Yu Tian invested 150,000 RMB. On August 2, 2019, sales stopped. The platform announced a suspension until August 16, citing an office relocation to Malaysia.
When it returned, the rules had changed: previously adopted dogs generated no returns and couldn't be sold. The platform later claimed to have been acquired by "gogame Company" and rebranded as "Let's go" ("Laishi Dog"). However, gogame's official website soon issued a statement denying any involvement, calling the reports fraudulent.
That statement crushed any remaining hope for Yu Tian and other users. In their维权 (rights-protection) WeChat group, over 400 members reported collective losses of at least 3 million RMB, with individual comments revealing investments of 230,000 RMB and debts from platforms like Jiebei.
"Huadeng Block Dog" was preceded by other "blockchain pet" schemes like "Block Cat," "Bit Pig," and "Lucky Zodiac Animals." "Bit Pig" promised a 28% return after 15 days before collapsing in July 2019; its operators were under police investigation by early August.
Multiple Ponzi Schemes
Liu Bing says he has lost contact with Guan Xin and other Haoyang Technology executives. Public records show Guan Xin controls several companies, including Huludao Xinrong Investment Consulting, Huludao Yitai Trading, and Liaoning Zhongxinhui Automobile Sales ("Zhongxinhui"). He is also Chairman and General Manager of Huludao Lvdi Agricultural Science & Technology ("Lvdi Agricultural"), holding about 20% of its equity.
Since 2018, Guan Xin and associates have launched multiple schemes under different guises, including agricultural products (Lvdi Agricultural's "Whole Egg Liquid") and car sales (Zhongxinhui).
"Whole Egg Liquid" promised investors would recoup a 30,000 RMB outlay in five months and receive 150,000 RMB total over three years. Zhongxinhui offered cars at roughly 40% off market price—for example, an 80,000 RMB car required a 50,000 RMB down payment, with Zhongxinhui supposedly covering the monthly installments. However, after a few months of payments last year, Zhongxinhui stopped, claiming lack of funds, and told investors to pay themselves. Because Zhongxinhui had arranged the auto loans, the total cost ballooned; an 80,000 RMB car could end up costing 150,000 RMB (down payment + full loan).
These schemes had stricter recruitment requirements but offered higher commissions. Liu Bing noted a local project manager in Shandong earned roughly 10,000 RMB daily from subordinate commissions. Following "Block Chicken's" collapse in January, the "Whole Egg Liquid" and Zhongxinhui operations also ceased.
Multiple investors told Time Finance they or family members invested across "Block Chicken," "Block Egg," "Whole Egg Liquid," and "Zhongxinhui," losing at least several hundred thousand RMB each. Li Gang (a pseudonym) from Liaoning said he paid a 50,000 RMB down payment to Zhongxinhui and 170,000 RMB in loan installments, bought 30,000 RMB of virtual currency on their advice, while his wife and child invested 90,000 RMB in "Whole Egg Liquid," and he bought 100,000 RMB worth of "chickens and eggs." He took out multiple loans and ultimately sold his house.
Liu Bing stated that, based on his knowledge, many people lost hundreds of thousands or millions of RMB through Guan Xin's projects, with the highest single loss exceeding 4 million RMB. Investors consulting lawyers believe the operators behind "Silicon Valley Block Chicken" are suspected of illegal fundraising and fraud. Police reports are now being filed.