The financial regulator of Shenzhen has issued an official warning, emphasizing the increase in cases of fraud related to the use of stablecoins and other cryptocurrency assets.
This is reported by Finway
Exploitation of Stablecoin Popularity
The published warning states that fraudsters are increasingly disguising their illegal activities as innovative projects related to “virtual assets” or stablecoins. Malefactors, taking advantage of citizens’ lack of awareness, are organizing financial pyramids, money laundering schemes, gambling, and other illegal projects, cloaking themselves in trendy terminology and promises of high investment returns.
“These structures use new concepts, such as stablecoins, to promote so-called investment projects related to ‘virtual assets’,” the warning states.
The regulator emphasizes that citizens who lose money as a result of participating in such schemes will bear responsibility for their losses independently. The official warning comes against the backdrop of information about major Chinese technology companies ramping up plans to launch stablecoins backed by the yuan.
Global Interest in Stablecoins is Growing
The popularity and interest in stablecoins are observed not only in China but also in other countries. In particular, the Japanese digital bank Minna recently announced a partnership with well-known companies such as Solana Foundation, Fireblocks, and TIS to explore the possibilities of using stablecoins in the financial sector.
The Shenzhen administration urges citizens to be cautious and not to fall for promises of quick wealth, carefully verifying information about investment proposals, especially those related to cutting-edge digital assets.