Recently, I recalled this case again, and it’s still quite thought-provoking. 2 million Chinese people were scammed out of 500 billion yuan; when you think about it, it’s outrageous—yet this is a real event that happened.

Many people know the tragic ending of MBI, but they don’t know how it gradually evolved into a Ponzi scheme. Zhang Yufa, this person, it’s no exaggeration to call him a genius con artist. His scheme evolution history is almost a textbook for multi-level marketing.

During the 2008 financial crisis, he opened a Hongdao Café. It sounds like a legitimate business, but in reality? Investing 6,000 ringgit could make you a shareholder, with monthly rebates and shopping vouchers, tripling in value over five years. Who wouldn’t be tempted by such low investment and high returns? But what happened? The café’s service was so bad that no one went, and it eventually closed down, with hundreds of millions of yuan just gone.

Interestingly, Zhang Yufa only spent one day in prison and paid a fine to get out. Having tasted the sweetness, his appetite grew bigger. In 2009, he started the “Dream Group,” claiming a return rate of 70% to 90%, still the same old trick—pay money to buy virtual products, sit back and earn interest, develop downlines to earn rewards. Isn’t this a pyramid scheme? But with his packaging, it attracted over a billion yuan in funds.

Later, when the Dream Group was investigated, he “broke up” early and escaped to Hong Kong to contact a company called SMI. SMI was also a multi-level marketing scheme, but more covert—virtual currency, physical stores, and a very strict scam system. Zhang Yufa “learned” there, integrating and optimizing his experience from Dream and SMI.

In 2015, Bitcoin exploded in popularity, and his MBI group was born. This time, he launched a virtual currency called mCoin that only rises in value—no dips. Users paid a 700 yuan membership fee, bought virtual currency to gain membership levels, then sat back to wait for 10% to 200% annual returns. It sounds more professional, right? But essentially, it’s still the same—only by continuously developing downlines and taking money from them can you make steady profits.

To increase credibility, MBI set up various physical stores where users could shop, stay, or get massages using mCoin. Zhang Yufa also spent heavily to bribe officials, claiming charity to boost goodwill. Loyal fans called him “Father Zhang,” treating him as a patriarch.

But as time went on, problems started to surface. The funds in accounts showed growth, but withdrawals became troublesome—limited to 10,000 yuan per day, with various excuses for delays. Some began to suspect it was a scam, but loyal followers instead came out to defend him. This is the most terrifying part of multi-level marketing—once faith is established, rationality disappears.

In 2017, China and Malaysia jointly cracked down on the MBI pyramid organization. Zhang Yufa was arrested on suspicion of money laundering, with over 90 accounts and 209 million yuan frozen. But he had strong connections and was released shortly after. Until 2019, MBI completely collapsed, and the headquarters went offline. By then, the number of victims in China had reached 2 million, with 500 billion yuan in funds evaporating.

The most ironic thing is that Zhang Yufa fled to Thailand to become a monk. Claiming it was for self-cultivation, but he only stayed a week. This brother still bought land and properties in Thailand, continuing to make money and enjoy life, until he was arrested jointly by police from three countries in July 2022.

Looking at this entire case, the scheme of the mCoin scam is actually very clear: no real products, no company profits, promises of super high returns, charging entrance fees, and requiring the development of downlines. This Ponzi scheme has been exposed countless times, so why do so many still fall for it?

Ultimately, human greed is the root cause. Who doesn’t want to get rich overnight? But there’s no such thing as a free lunch. What falls from the sky is often not a pie, but a trap. Zhang Yufa, the con artist, has fallen, but such scams are hard to eradicate because there will always be people who believe they are the chosen ones to hit the jackpot. That’s the most terrifying part.