Shenzhen authorities have issued a public warning about a surge in illegal financial schemes involving stablecoins and other digital assets, calling on residents to remain vigilant against scams that are often disguised as innovative investment opportunities.
According to the city’s Office for the Prevention and Crackdown on Illegal Financial Activities, these schemes are being orchestrated by unlicensed entities that are taking advantage of the public’s growing interest in digital finance particularly stablecoins. By marketing themselves under buzzwords like “financial innovation” and “digital assets,” these groups promote high-return promises while engaging in unlawful fundraising, gambling, fraud, pyramid schemes, and money laundering.
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Some illegal institutions have illegally absorbed funds by using concepts such as “StableCoins” and “Digital Assets”, and are suspected of illegal fundraising,… pic.twitter.com/iZlnyXd3F5
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Critically, officials emphasized that these organizations lack approval from national financial regulators and are not authorized to collect funds from the public. Their use of technical jargon and exaggerated claims misleads investors, ultimately disrupting the economic order and placing public financial safety at serious risk.
To address this threat, authorities reminded citizens that under China’s Regulations on the Prevention and Handling of Illegal Fundraising, all unauthorized capital-raising activities are strictly prohibited. Individuals who fall for such schemes must bear the financial consequences alone. As such, the public is urged to adopt a rational investment mindset, avoid blindly trusting flashy promises, and develop a clearer understanding of digital financial products.
Furthermore, residents who encounter suspicious promotions involving stablecoin-related investments or similar unauthorized activities are encouraged to report these incidents to local financial oversight bodies or the police. Verified reports will be thoroughly investigated, and whistleblowers may be eligible for rewards according to established regulations.
This crackdown comes amid a broader national shift. China is stepping up efforts to reduce reliance on the US dollar by leveraging its leadership role in the Shanghai Cooperation Organization (SCO). Through this multilateral platform, the country is pushing for alternative financial systems and regional currencies as part of a long-term strategy to safeguard economic sovereignty and limit exposure to US-led financial sanctions.
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