August 12, 2025
By Anjali Kochhar
A new wave of scrutiny is sweeping China’s crypto sector as regulators move against deceptive investment models disguised as digital assets. Authorities in Hubei’s Shiyan City have launched an investigation into three crypto ventures suspected of operating pyramid schemes, signaling a stronger crackdown on financial misconduct in the space.
The three Shenzhen-based projects under investigation are Youke Chuang, Shiyi Hui, and Ronghui Capital. They are alleged to have used referral-based recruitment tactics and made promises of “capital protection” along with unrealistic high returns to lure investors. Reports suggest these operations were running through offshore platforms to bypass China’s strict ban on virtual currency trading and intermediary services.
The Shiyan City Market Supervision Administration has warned investors about the dangers of such schemes, reiterating that all forms of intermediary services involving virtual currencies remain illegal under Chinese law. Officials noted that these operations rely on constant recruitment rather than genuine value creation, which are classic traits of pyramid structures that inevitably collapse when new participants slow down.
This latest action is part of an ongoing enforcement campaign that China has maintained since its comprehensive ban on crypto-related activities in 2021. While no arrests have been confirmed so far, regulators have issued public warnings and stepped up investigations to expose deceptive operations that exploit decentralised finance systems.
The GMCE platform has also come under cross-border scrutiny. Authorities in the Maldives have identified it as a pyramid scheme and initiated legal proceedings, highlighting growing international cooperation in tackling crypto-based fraud. China’s selective approach, focusing on specific problematic projects, shows an intention to protect investors without completely hindering legitimate blockchain development.
Analysts believe that such targeted crackdowns could help restore investor confidence by separating lawful crypto innovation from predatory scams. This aligns with a broader global push to increase oversight while still allowing technology-driven financial services to grow under appropriate safeguards.
As China works to dismantle fraudulent crypto operations, the message is clear: digital finance can thrive only when built on transparency and trust. With enforcement becoming more focused and international collaboration increasing, the path toward a safer and more credible crypto market is beginning to take shape.
About the author
Anjali Kochhar covers cryptocurrency and blockchain stories in India as well as globally. Having been in the field of media and journalism for over four years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
