Beijing Internet Finance Industry Association: Beware of illegal fundraising using new concepts such as stablecoins

Planet Daily News: The Beijing Internet Finance Industry Association stated in its public account that recently, various digital currencies and related concepts represented by "stablecoins" have attracted market attention. Some illegal institutions and individuals, under the guise of "financial innovation," "blockchain technology," "digital economy," and "digital assets," exploit the public's limited understanding of new financial concepts by issuing or hyping so-called "virtual currencies," "digital assets," and "stablecoin investment projects," promising high returns to induce public fund participation and speculation. These activities exhibit significant illegal fundraising risk characteristics: First, lack of qualifications. These institutions or individuals have not been legally approved or registered by the State Council's financial management departments and lack legal qualifications to absorb public deposits, sell financial products, or issue securities. Second, concept packaging. They use emerging, complex concepts like "stablecoins," "DeFi," and "Web3.0" for packaging and hype, deliberately creating information asymmetry to confuse investors. Third, false promises. They commonly exaggerate and make false commitments such as "guaranteed profits," "high fixed returns," and "principal protection," exploiting public desire for high returns. Fourth, fund pool operations. Their model often depends on attracting new investors' funds to maintain operations or pay previous investors' returns. Once the capital chain breaks or project parties flee, investors face massive risks of unrecoverable principal. Fifth, risk spillover. Such activities easily evolve into illegal fundraising, financial fraud, pyramid schemes, money laundering, and other criminal activities, severely disrupting economic and financial order, endangering public property safety, and damaging social credibility foundations. The Beijing Internet Finance Industry Association solemnly reminds and calls on consumers to: Clearly recognize the essence, be highly vigilant against any investment projects promising high returns or principal protection, and remember that "high returns inevitably accompany high risks"; before investing, verify the legal qualifications of institutions and products through official state financial management channels and choose licensed, regular financial institutions; fully understand the high complexity and volatility of digital currencies like stablecoins, establish correct monetary perspectives and rational investment concepts; consciously resist and stay away from any virtual currency speculation, unauthorized token issuance, and unapproved "digital asset" investment projects to effectively protect personal property safety. If illegal fundraising clues are discovered, immediately report to financial supervision departments, public security departments, or this association (association reporting hotline: 400-661-9609). According to laws and regulations like the "Regulations on Prevention and Disposal of Illegal Fundraising," the state prohibits any form of illegal fundraising. Losses from participating in illegal fundraising shall be borne by participants themselves. Consumers are urged to genuinely enhance risk prevention awareness and jointly maintain a good financial ecological environment.