A new development has been announced in the Gemcoin case, as a U.S. federal court adjudicated that Steven Chen, chairman of U.S. Fine Arts Investment Inc. (USFIA), along with several others were in violation of securities laws. Chen and the others were ordered to return their illicit gains, according to Thepaper.cn.

Gemcoin, first issued by USFIA on Sept. 1, 2014, was described as a virtual currency similar to Bitcoin. The official Chinese version of the Gemcoin website explained that Gemcoin could circulate globablly. In addition, those who purchased Gemcoin could obtain both company-owned amber and also value-added profit of the Gemcoin. The company adopted a direct selling operation mode, under which members registered as "dealers" could obtain awards based not only on sales performance but also "mutual awards." Extra commissions could also be obtained for users who attracted new participants.

The virtual Gemcoin scheme targeted mainly low-income groups both in China and the U.S. In September 2015, police in Zhejiang busted a Gemcoin pyramid sales group involving 300 members and more than 10 million RMB ($1.44 million). USFIA was closed down, and the U.S. Securities and Exchange Commission (SEC) lodged a civil lawsuit against Steven Chen and his 13 companies, which issued and sold securities without registration.

“About 100,000 people were deceived, among which most were Chinese, and also people from other countries. It was mainly low-income groups, including the elderly and unemployed, who were cheated out of their annuity and unemployment insurance,” said Liu Longzhu, attorney for the victims. Liu added that the total sum lost by his clients totaled $200 million.

Now, the U.S. court has adjudicated that Chen and others involved in the case will be forced to pay back the illicit gains.

“In such cases, the victims are expected to take back their investments -- at least a portion within a year,” said Liu.