Shenzhen, aiming to prevent illegal financial practices, issued a warning about the risks associated with using stablecoins for fundraising.
Risks of Illegal Use of Stablecoins
The Special Task Force Office for the Prevention and Control of Illegal Financial Activities in Shenzhen issued a warning about the improper fundraising using stablecoins, indicating the risks to the financial system. Authorities advise the public to remain cautious and informed about investment opportunities.
Industry Reactions to Threats
The Shenzhen task force flagged illegal fundraising using stablecoins as a risk that impacts economic order and public safety. The notice urges people to report schemes involving virtual currencies and avoid extravagant promises. Experts emphasize the importance of distinguishing genuine innovations from criminal activities, advocating for better regulatory frameworks to mitigate risks.
History of Cryptocurrency Regulation in China
Since 2013, China's regulatory stance has evolved from Bitcoin service bans to a full ownership prohibition in 2025, reflecting ongoing regulatory caution toward digital assets.
Shenzhen's warning about risks associated with illegal use of stablecoins highlights the need for public oversight over financial schemes and the importance of responsibility among investors.
