Banking Regulator Warns of Prevalence of Cryptocurrency Fraud in China


The China Banking and Insurance Regulatory Commission (CBIRC) has just issued a warning about the ongoing presence of cryptocurrency-related fraud within China.

CBIRC’s warning stated that “certain illegal elements are using the banner of ‘financial innovation’ and ‘blockchain’ to issue accept funds via the issuance of what they refer to as ‘virtual currency,’ ‘virtual assets,’ and digital assets,’ harming the lawful rights and interests of the public.”

“These activities are not in reality based on blockchain technology, but talk up the concept of the blockchain to engage in illegal fund-raising, and rein reality fraudulent.”

CBIRC warned Chinese consumers to be on the look out for the following forms of fraud:

  1. Use of overseas servers for websites to provide illegal activity to domestic residents. “A number of people on Internet chat groups have claimed that they have obtained investment quotas for offshore high-quality blockchain projects and can act as agents for investment – there is an extremely strong likelihood that these are fraudulent activities.”
  2. Extravagant claims that “coin prices can only rise and not fall,” or that “investment cycles are short, returns are high and risk is low.” “Illegal elements use behind-the-scenes manipulation of the price trends of so-called virtual currencies, and employ illegal methods to obtain huge profits by setting thresholds for profits and cashing in.”

Related stories

Ren­min U. Fin­tech Pro­fes­sor Says Li­bra Poses a Threat to China, Do­mes­tic Com­pa­nies Should Is­sue Their Own Dig­i­tal Cur­ren­cies

Chi­na’s Peak In­ter­net Fi­nance Body Warns against Cryp­tocur­rency Trad­ing and In­vest­ment Abroad

Shang­hai and Shen­zhen Launch Crack­downs on Cryp­tocur­rency Ex­changes