Shenzhen Warns of Stablecoin Scams as Neighboring Hong Kong Pushes Ahead
Shenzhen authorities issued a public alert regarding scams involving stablecoins, highlighting a rise in illegal fundraising and fraud linked to crypto. The city's task force noted that some illegal entities exploit the public's lack of understanding of stablecoins, engaging in activities such as gambling, pyramid schemes, and money laundering. Residents are encouraged to report scams, with rewards for tips. Despite bans on crypto, trading persists in China, with organized crime groups operating scamming syndicates in Southeast Asia. The alert follows JD.com's warning about fake promotions of a "JD stablecoin." Meanwhile, Hong Kong is set to implement a regulatory framework for stablecoins in August, allowing only licensed firms to issue fiat-referenced tokens. Financial Secretary Paul Chan emphasized stablecoins' potential to reshape cross-border payments. Hong Kong's approach is seen as progressive, focusing on business-to-business applications rather than retail, reflecting public unfamiliarity with stablecoins and advanced domestic digital payment systems.
