Those Who Are "Experts" Are the Ones Who Get Scammed; Making Money Is Like Grabbing at Thin Air | Distinguishing Truth from Falsehood

China Economic Network Editor's Note: In recent years, China has seen a surge in illegal fundraising cases, causing severe harm to social stability and the safety of citizens' assets. Under the guidance of the Inter-ministerial Conference on Handling Illegal Fundraising Cases, China Economic Network has launched a series of promotional educational short video programs - "Distinguishing Truth from Falsehood", which will focus on typical cases of illegal fundraising, conduct knowledge popularization and risk warning to raise awareness and ability among the public to identify false information.

Recently, some unscrupulous individuals have been using the guise of "blockchain" to attract funds for their "metaverse" projects, claiming to offer exclusive investment opportunities, which is suspected of being illegal fundraising, fraud, and other criminal activities.

In fact, such illegal fundraising has a long history of tragic precedents. Judge Liu Wanqun of the Beijing Second Intermediate People's Court Criminal Division spoke with China Economic Network reporters about a typical case: In 2018, defendant Wang registered a company, claiming that his "cloud storage chain" project would increase in value by 70% over 180 days and offer free retirement services at five-star institutions, as well as returns on investment. He scammed hundreds of investors out of over 22 million yuan within a year, with most of the funds already spent.

Judge Liu Wanqun analyzed that these unscrupulous individuals often target people who have some understanding of blockchain and metaverse technology, as well as those who may have had successful investment experiences in their past. These scammers create elaborate schemes to persuade these investors to put their money into their fictional projects.

"They usually tell you about a very cutting-edge technology and explain many national policies, linking their technology to national policies and forming an impression that this project is in line with national policies, social development trends, and technical advancements. They make investors believe they are on the right track and may have stumbled upon an investment opportunity. As a result, investors will be scammed out of their funds." Judge Liu Wanqun said.

Judge Liu Wanqun emphasized that "usually, the initial participants can earn some small returns, but then they may believe the project is actually profitable and will introduce their friends and family to join the project. This way of recruiting more people, the number of investors will grow exponentially until it eventually collapses, leaving all investors with significant losses.".

Judge Liu Wanqun warned investors that once they suspect they may be scammed, they should first collect evidence, such as audio and video recordings, transfer records, and signed contracts, and carefully preserve them. Then, report the case to the public security authorities in a timely manner, submit the evidence to the authorities, and wait for further instructions.

Preventing and avoiding illegal fundraising, don't become the next victim. Learn more about it by watching China Economic Network's "Distinguishing Truth from Falsehood" series of videos on preventing illegal fundraising.