This is a really sad case. Although there is probably nothing illegal happening here there is a serious loss of integrity. I really hope you will be able to finish your PhD, considering the hard work you have put into it. Something similar happened to me, although slightly different as I finished my PhD. I was asked to write a post-doc proposal to continue my research (much of which I have published). However, I found out while browsing the internet to find updates for my written proposal that the work has been given to a new PhD instead. A proposal had been written by my former supervisor and a new PhD student was advertised for. Nothing I could do as I had signed away intellectual property rights to the university.