(Yicai Global) March 19 -- A Chinese regulator has handed e-commerce platform operator Peanut Diary Network Technology the largest fine in the history of the country's online retail sector for pyramid selling.

Guangzhou's Administration of Industry and Commerce fined Peanut Diary CNY1.5 million (USD223,400) and confiscated CNY73.1 million worth of illegal income, the watchdog said on its website on March 14.

Peanut Diary "fully respects and accepts the penalty from regulators," the Guangzhou-based company said in a statement, as it admitted non-compliance in its early development. The firm has made great efforts to rectify its business, it added. 

The platform had approached regulators to check the legality of its business model because it plans to go public on the Nasdaq in 2020.

Founded in 2017, Peanut Diary prompts its users to become superusers by paying a fee of CNY99 (USD14.70) in order to get commissions from each new referral's purchases on Alibaba Group Holding's Tmall and Taobao shopping apps. Superusers had up to 51 ranks to climb and commissions went as high as CNY456 million.

The company's monthly gross merchandise volume had risen sharply to CNY3 billion (USD446.8 million) at the end of last year, along with 21 million registered users.

Editor: Emmi Laine