- Shenzhen warns of stablecoin scams targeting residents.
- Authorities caution against illegal financing schemes.
- Public advised on vigilance against unregistered projects.
In Shenzhen on July 7, 2025, the local government issued a warning about stablecoin scams, cautioning residents against illegal financing schemes.
This event underscores rising concerns over financial scams, with Shenzhen’s proactive approach aiming to shield residents from fraudulent activities.
The Shenzhen Municipal Office has issued official warnings about stablecoin scams exploiting the public through misleading investment opportunities. These activities are often associated with “virtual currencies” and “digital assets,” leading to potential illegal fundraising and fraud. The warning, underlining government vigilance, highlighted that entities exploit stablecoin concepts to lure investments, leading to risks like money laundering. Authorities urge the public to report any suspicious activities and avoid unregistered projects.
“These entities exploit new concepts such as stablecoins to hype up so-called investment projects involving ‘virtual currencies,’ ‘virtual assets,’ and ‘digital assets.’ They engage in false public advertising to solicit funds from the public, giving rise to illegal activities such as fundraising, gambling, fraud, pyramid schemes, and money laundering.” – Shenzhen Municipal Office of the Special Working Group for Preventing and Combating Illegal Financial Activities
Historically, China’s crackdowns have led to a decrease in retail participation, influencing local stablecoin liquidity and financial flows. However, major assets like USDT and USDC remain unaffected, despite indirect reputation impacts. Potential outcomes of this warning could encompass increased regulatory scrutiny and tightened control measures on digital assets, considering past trends and enforcement actions by the Chinese government.
