Regarding the LTC ponzi scheme: the question is if this guy will really cash out to RMB anytime soon. Personally I highly doubt it, because Chinese authorities will rip him to pieces, when this thing blows up. If I would be him, I would leave the country as soon as possible.
So that LTC run up and free fall was due to this ponzi or just the fact that they cashed out the LTC ?
The run up was very likely caused by the ponzi scheme, because the LTC amount was insane. It is speculated that the LTC was dumped for BTC (IMHO very probable). Now the question is what will happen with the BTC stash this guy 'earned'. In one of the articles posted above they speculate that the BTC are dumped for RMB on the Chinese exchanges. Personally I do not believe that. The guy would be crazy if he would stay in mainland China.