Today I came across news about the collapse of Yuzhi Financial's fund, and I was so angry that I wanted to curse! This scam platform operates under the guise of 'virtual currency trading', claiming a daily profit of 1% and a 370% return over 30 days, deceiving more than 3 million people with an involved amount exceeding 20 billion. Now the platform is starting to 'soft exit', requiring a 20% 'self-certification deposit' for withdrawals, with transaction fees rising to 30%. In plain terms, they are looking to harvest again! This article will expose the tricks of this fund, teaching you how to identify similar scams and the impact this incident has on the market.
First, let me summarize how outrageous this scam is. Yuzhi Financial created an app called 'HSEX', allowing investors to buy U and follow trades, claiming to operate under the founder 'Chen Yuzhi'. There are two trading sessions daily, with a fixed return rate of 0.5%, making it 1% a day. They also introduced dynamic returns, where recruiting others can earn commissions; the more people recruited and the more invested, the higher the commission. To gain trust, they encouraged investors to set up studios, providing each studio with a monthly rent subsidy of 500 U. Even worse, they organized an annual dividend event, making it impossible for everyone to withdraw during the period. After the event ended, they started setting withdrawal thresholds and required everyone to pay a deposit.
Many investors did indeed make a little profit at the beginning. For example, someone invested 15,000 and withdrew 6,600 yuan, then believed it to be true and brought in relatives and friends, even investing their coffin funds. As a result, the platform has soft-launched now, and the principal cannot be retrieved. What's even more frustrating is that there are a group of people called 'team leaders' who comfort everyone in the investor group and then recommend new funds, saying they can 'recover losses', but in fact, they are just changing places to continue scamming.
Here comes the practical advice, teaching you 3 tips to identify funding scams, so you won't fall into traps again! First tip: Check if the returns are reasonable. Any cryptocurrency project claiming 'fixed returns', 'daily profit of 1%', or 'guaranteed profits' is a scam! The cryptocurrency market is so volatile, how can there be fixed returns? Those who say they can give you fixed returns are either funding schemes or Ponzi schemes, using the money from new investors to pay old investors returns. Once there are no new investors, it will collapse immediately. Remember, there's no free lunch in the sky, only traps.
Second tip: Check the platform's qualifications. Legitimate cryptocurrency trading platforms will have clear regulatory licenses, such as the VASP license in Hong Kong or the MSB license in the United States. Platforms like YuZhi Financial, which have no regulatory licenses and whose apps are not registered, are illegal. Before investing, make sure to check the platform's qualifications; if you can't find them, just pass. Third tip: Look at the withdrawal rules. Legitimate platforms may have withdrawal fees, but they are not high and do not set various bizarre thresholds. If a platform requires a deposit to withdraw, or requires referrals to withdraw, or suddenly raises fees, it is definitely planning to run away. Withdraw your funds as soon as possible, take out as much as you can.
Let's talk about the impact of this incident on the market. My personal opinion is: the short-term impact on the overall market is not significant, but it will undermine retail investors' confidence, and small coins may drop as a result. This funding scheme mainly targets novice retail investors, whose funds are relatively small and who are trading on illegal platforms, not entering the mainstream trading market. However, this incident will make many novices fearful of cryptocurrency and hesitant to enter the market, and it will also attract more regulatory attention to illegal trading platforms, leading to more crackdowns in the future.
However, from a long-term perspective, this is a good thing. Cleaning out these funding scam artists can make the market cleaner and help those who genuinely want to invest in cryptocurrency avoid detours. Many people say 'the crypto circle is all a scam', but it is not a problem with the crypto circle itself; it is these scammers who take advantage of the name of cryptocurrency to scam people. What we need to do is stay alert and not be tempted by high returns.
My operational advice is: If you know someone who is still participating in similar funding schemes, urge them to exit quickly; ensure that your own assets are placed on legitimate platforms, and do not use those unqualified small platforms anymore; do not blindly bottom fish in small coins recently, wait until market sentiment stabilizes. Remember, the first principle of investing is to preserve your principal, not how much profit you can make.
Finally, I want to tell those scammers: those who mix in this world will eventually have to pay the price! I also want to say to the investors who have been scammed: don't think about finding new funding schemes to recover losses, that will only lead you deeper into trouble. Quickly report it to the police and strive to recover your losses. Follow me, tomorrow I'll expose some common cryptocurrency scams, like 'virtual currency mining scams' and 'NFT airdrop scams', teaching you how to avoid them one by one. Follow me @链上标哥 and don’t get lost!
