The Beijing Internet Finance Industry Association (BIFA) issued a notice on July 9 urging retail investors to reject pitchbooks that wrap old-style pyramid sales in crypto terminology.
The circular listed five hallmarks of illegal fundraising: operating without a licence, using technical jargon to amplify information gaps, issuing false guarantees, recycling new deposits to pay earlier participants, and cross-linking into fraud or money laundering.
BIFA advised the public to verify a firm’s licence through national regulators and to be aware that high returns often carry high risk.
It also reminds victims that China’s Regulation on the Prevention and Disposition of Illegal Fundraising holds the investor liable for any losses. The reports highlighted that the warning totals nearly 1,500 Chinese characters and appeared first on BIFA’s verified WeChat channel.
The amount was worth more than $4 billion at 2020 prices, making it one of the largest Ponzi schemes using crypto buzzwords.
The episode demonstrated how promoters can migrate coins across exchanges and mixers before liquidation, pushing enforcement into a multi-year pursuit.
Notably, China banned direct crypto-to-fiat exchange services in 2021, yet domestic interest persists via offshore platforms and grey-market on-ramps.
Regulators in Beijing, Shanghai, and Shenzhen have each released at least one consumer notice on token scams this year.
Retail speculation has accelerated on mainland social platforms where an unofficial “stablecoin concept” stock index has risen 88% since April, as Reuters reported.
Market interest also tracked Hong Kong’s incoming stablecoin rules, due to take effect August 1, as large technology firms explore renminbi-pegged tokens.
Reports also surfaced that domestic blogs have begun promoting “USDT mining pools” and “insured CNH stablecoins,” prompting local regulators to prepare enforcement actions.
BIFA’s statement concludes by publishing its hotline and recommending that investors who identify unlicensed activity report it to the police or financial supervisors.
The association adds that it will forward credible tips to provincial task forces that track unlawful public fundraising.
