China Warns Retail Investors of Crypto Pyramid Schemes
The Beijing Internet Finance Industry Association (BIFA) issued a notice on July 9, cautioning retail investors to be wary of pitchbooks that disguise traditional pyramid schemes with crypto terminology. The association highlighted that promoters have started advertising “stablecoin wealth plans,” “Web 3.0 dividends,” and similar offers that promise fixed returns, which are often indicative of illegal fundraising activities.
The circular released by BIFA outlined five key indicators of illegal fundraising: operating without a license, using technical jargon to exploit information gaps, issuing false guarantees, recycling new deposits to pay earlier participants, and cross-linking into fraud or money laundering. The association…
