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In the Chinese city of Shenzhen warned residents of fraudulent investment systems associated with digital assets and stablecoins.
In a declaration The municipal office of the city working group for prevention and the fight against illegal financial activities published on July 7 was warned of misleading platforms that act as a legitimate crypto investment opportunities.
According to the working group, bad actors use public enthusiasm for digital assets. They support false investment opportunities using terms such as “Stablecoins”, “Virtual Currency” and “Digital Assets”.
These groups use opaque advertising to attract victims into illegal activities, including pyramid schemes, gambling, fraud and money laundering.
The statement stressed that such schemes violate Chinese financial regulations. According to the authorities, most of these organizations are unlicensed and illegally raise funds from the public. In such cases, any financial losses are not protected and must be carried by those who have invested in fraudulent projects.
As a result, the city urged investors to avoid the offers of unrealistic revenues and report suspicious platforms.
According to the statement:
“If you find that relevant institutions are dealing with illegal fundraising in the name of investment in stablecoins, please report it to the unimportant department of the city or district or the Ministry of Public Security in time.
Stablecoins draws attention to international attention
Shenzhen’s warning comes in the middle of a global increase in stablecoin adoption, while demand grows on developing and developed markets.
Stablecoins, which are digital assets suspended on Fiat currencies such as the US dollar, have gained popularity for offering price stability in volatile markets. Thanks to this tool, they have made them the opportunity for users who want to store a value or transaction across the border.
The Stablecoin market worth estimated by $ 256 billion is mainly dominated by US tokens such as US dollars such as Tether’s USDT and Circle’s USDC.
For this reason, Chinese companies like JD.com and Ant Group have reportedly expressed Interest in the development of stablekoin caused by CNY. The aim of this step is to counterweight Dominance of dollars -based assets in the US and increase the international use of Chinese Juan.
However, the US authorities are also working on further rooting dominance of dollars based on dollars.
As a result, US lawmakers recently introduced Genius Act– a new law focused on the regulation and support of innovation of stablecoins. US Minister of Finance Scott Betting recently stated that the regulation would allow stablecoins associated with the dollar Exceed the market limit of $ 2 trillion.
