Economic Observer: Yuzhi Financial operates a Ponzi scheme under the guise of cryptocurrency trading.
TL;DR
Economic Observer exposes Yuzhi Financial's Ponzi scheme disguised as cryptocurrency trading, promising high returns but using new investments to pay earlier investors. Investors face withdrawal issues, and authorities have issued risk warnings.
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PANews reported on December 14th that the Economic Observer published an article exposing a Ponzi scheme operated by Yuzhi Financial Co., Ltd. in China, using "virtual currency trading" as a gimmick. Yuzhi Financial Co., Ltd. and its affiliated platforms claimed that investors could earn a fixed 1% daily return (static return) by following Bitcoin contract trading, with additional dynamic rewards for recruiting new members. The minimum investment was 7400 yuan, and the company claimed a cumulative return of up to 370.6% in 30 days, even doubling during annual promotional periods. However, there were no actual transactions; the returns were paid out to earlier investors through newer investments.
Recently, many investors have reported that their virtual asset trading app "HSEX" is unable to withdraw funds normally. The platform subsequently required users to pay a "self-certification margin" of 20% of the total account amount and increased the withdrawal fee from 10% to 30%.
Previously, the Joint Conference Office for Preventing and Combating Illegal Financial Activities in Xinyi City, Guangdong Province, the Leading Group Office for Preventing and Combating Illegal Financial Activities in Yulin City, Guangxi Zhuang Autonomous Region, and the Financial Affairs Center of Shigu District, Hengyang City, Hunan Province had all issued relevant risk warnings. The Hong Kong Stock Exchange also disclosed that Yuzhi Financial and its related HSEX and HKEX websites had been listed as suspicious websites multiple times and had no connection with the Hong Kong Stock Exchange.