The Shenzhen government has issued a warning about increasing fraud schemes related to stablecoins. Let's examine the details and how to protect your funds.
Fraud Warning
The Shenzhen government has warned of a new wave of stablecoin scams in China. With the growing adoption of stablecoins, numerous new issuers have emerged, often creating fraudulent assets with no real backing.
Risks from New Projects
Local authorities are monitoring newly created stablecoin projects that are gaining attention. Illegal institutions claiming to use financial innovations and stablecoins as gimmicks are being discovered, exploiting a lack of real understanding of crypto to extract fiat assets in exchange for tokens with no provable backing.
Growth and Regulation of Stablecoins
Regulations for stablecoins in the USA and Euro Area have positively affected supply. Currently, USDT and USDC are at a peak with a supply of $249.8 billion. Although algorithmic stablecoins are a niche with high de-pegging risk, asset-backed tokens are showing stable growth.
In light of rising scams related to stablecoins, it is crucial to remain vigilant and avoid offers from unregistered institutions. Protecting your investments should be a priority.
