Warning Against Fake Crypto Schemes
Authorities in Shenzhen, China, have issued a warning to citizens about illegal fundraising schemes disguised as stablecoin and cryptocurrency investments. The city government’s task force for combating illicit financial activity has urged the public to be cautious of unlicensed entities promoting digital asset investments.
How the Scams Work
Officials said that these groups exploit the public’s limited knowledge of stablecoins and crypto-related terms to mislead investors and fuel speculative investments. They added that such organizations are often fronts for illegal operations that conduct fundraising, online gambling, fraud, pyramid schemes, and money laundering. The task force warned citizens that losses incurred from these schemes are unlikely to be reimbursed.
Consequences of Participating in Illegal Fundraising
Under Chinese law, individuals who participate in illegal fundraising may bear personal liability for financial losses. The city government has urged the public to adopt a rational investment mindset, refrain from blindly believing grandiose promises, and establish a correct understanding of money and investment.
Reporting Illegal Activities
Citizens are encouraged to report any entities raising funds under the guise of stablecoin investments or similar schemes. Chinese authorities said that people can report these illegal activities to their district authorities or law enforcement. The relevant departments will verify the leads and act accordingly, and informants may receive rewards based on relevant regulations.
Recent Incidents of Fake Stablecoin Promos
The warning comes amid a wave of fake JD stablecoin promotions that emerged on Chinese social media. The Chinese e-commerce giant, JD.com, said that entities had been misleading the public, claiming to be affiliated with the company and offering fake stablecoins in exchange for users signing up. Similar fraudulent stablecoin campaigns have emerged across China, according to WeChat accounts.
JD’s Interest in Stablecoins
JD has shown a strong interest in stablecoins, announcing plans to apply for a stablecoin license in Hong Kong on June 18. However, the company’s interest in stablecoins has also made it a target for scammers, who are using its name to promote fake stablecoins.
Conclusion
The warning from Shenzhen’s authorities serves as a reminder to be cautious when investing in cryptocurrency and stablecoins. It is essential to do thorough research and due diligence before investing in any digital asset. By being aware of the risks and reporting suspicious activities, citizens can help prevent the spread of illegal! fundraising schemes and protect their financial well-being.
