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Shenzhen Authorities Flag Risks of Fake Crypto Fundraising Schemes

Key Takeaways

  • Authorities in ​Shenzhen warned that fake crypto schemes use complex terms to mislead and collect funds illegally;
  • Victims of unlicensed crypto investments risk losing money and may face legal responsibility;
  • Officials urged caution and encouraged the public to report any suspicious stablecoin fundraising activities.

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Shenzhen Authorities Flag Risks of Fake Crypto Fundraising Schemes

Local officials in Shenzhen have issued a warning about fake investment opportunities linked to stablecoins and other cryptocurrencies.

These warnings came from the city’s task force that monitors illegal financial activity.

The notice explained that some groups are using digital currency terms to confuse people and convince them to invest. Many of these groups do not have approval to collect money from the public and are often involved in scams such as gambling websites, fake investment plans, or money laundering.

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Authorities said these groups take advantage of people who are not familiar with how stablecoins or crypto work. They use technical language and promises of easy profits to gain trust.

The government noted that losses caused by these illegal fundraising operations usually cannot be recovered. In fact, under Chinese law, people who join such schemes might even be held responsible for the money they lose.

The task force urged everyone to exercise caution when dealing with any group offering crypto investments. People were asked not to believe claims that sound too good to be true and to think carefully before sending any money.

The public was also asked to report any suspicious activity, especially if someone is collecting funds using terms such as "stablecoin" or "blockchain project".

Recently, Hong Kong's Customs and Excise Department announced plans to fight money laundering involving cryptocurrencies. How? Read the full story.

Aaron S. Editor-In-Chief
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.
With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.
Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.
Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.

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