Authorities in Shiyan, Hubei Province, have launched an investigation into several cryptocurrency projects suspected of using Ponzi schemes. The pursuit of high returns and referral programs have raised risks for investors.
Investigation of Projects in Shiyan
The Shiyan Market Supervision Administration issued a risk warning and initiated an investigation into the cryptocurrency projects "Youke Chuang," "Shiyi Hui," and "Ronghui Capital." Officials allege that these projects incentivized membership growth and promised high returns through referral models that resemble pyramid schemes. Regulators emphasize that such activities are illegal under China's stringent cryptocurrency trading regulations.
Continued Regulatory Crackdown on Cryptocurrency in China
Chinese authorities are actively pursuing actions against virtual currency schemes, with the number of arrests for illegal trading activities rising to over 1,200 in 2022. These measures have significantly curtailed the scale of cryptocurrency operations in the country. Regulators stress that participation in such projects cannot guarantee the safety of funds.
Impact on the Global Cryptocurrency Market
Despite ongoing investigations in China, experts believe that these measures are unlikely to significantly impact global cryptocurrency markets. It is expected that local actions will primarily focus on ensuring compliance with domestic laws, without affecting the global markets. "Chinese authorities are likely to step up surveillance of bitcoin and the cryptocurrency market as a whole in the coming years," analysts suggest.
The investigation of cryptocurrency projects in China highlights the need for caution among investors. The emergence of such schemes in the country indicates ongoing efforts by authorities to regulate virtual currency trading.
