Cryptocurrency and pyramid schemes add to US$44.5 billion surge in illegal fundraising in China
- Police investigated more than 10,000 cases of illegal fundraising last year, a 22 per cent rise in the caseload, according to top prosecutors
- The total amount involved also rose, more than doubling to about 300 billion yuan, the Supreme People’s Procuratorate said
Chinese police investigated more than 10,000 cases of illegal fundraising last year, a 22 per cent rise in the caseload, according to China’s top prosecutors.
The total amount involved also rose, more than doubling to about 300 billion yuan (US$44.5 billion), the Supreme People’s Procuratorate said on Wednesday.
Apart from traditional hotbeds such as product marketing, real estate investment, and education, there has been a big rise in fundraising schemes in online lending, wealth management, private equity, cryptocurrency, and elderly care services.
The Supreme People’s Procuratorate said many of the ventures were pyramid schemes masquerading as financial innovation.
The growth in illegal fundraising adds pressure on the Chinese leadership, which is trying to crack down on risks in the financial system while also spurring the economy, which slowed to its lowest growth rate in 28 years last year.
The figures were released as the Supreme People’s Procuratorate, the Supreme People’s Court and the Ministry of Public Security jointly released a document designed to clarify what activity is deemed illegal and how to handle cases that cross jurisdictions.