Chinese financial watchdogs and police in a city in the Liaoning province released a notice urging investors to beware of “illegal fundraising activities” disguised as lucrative investment opportunities involving cryptocurrency and the metaverse.
The notice is the outcome of China’s ongoing crackdown on fraud involving cryptocurrencies and the ban on cryptocurrency trading.
Six other authorities and Dalian’s securities authority said in a combined notice that “unscrupulous individuals” have set up scams on WeChat groups and other online platforms to trick investors into downloading unauthorized apps and buying fake cryptocurrency. The authorities claim that these actions may indicate fraud, unlawful fundraising, and other criminal activity.
The People’s Bank of China and other national regulatory organizations had previously issued many warnings outlining the unlawful nature of token issuance, financing, and trading before Dalian’s officials issued their public warning.
The Supreme People’s Court, the PBOC, and several other central authorities issued an order outlawing cryptocurrency trading on the mainland in September 2021. The prohibition made it clear that services offered to mainland Chinese citizens by foreign cryptocurrency exchanges are illegal financial operations.
Hong Kong last year extended a warm welcome to cryptocurrency companies, in contrast to the more general crackdown on cryptocurrency trade and mining on the Chinese mainland.
With the formal launch of its cryptocurrency licensing program for virtual asset trading platforms in June 2023, Hong Kong permitted approved exchanges to provide retail trading services. Two platforms, HashKey and OSL, have received licenses from Hong Kong.
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