BIFA Warns Investors of 200% Fraud Risks in Web3 and DeFi Deals

Beijing Internet Finance Industry Association (BIFA) issued a warning on July 9, 2025, through their verified WeChat account, highlighting concerns regarding certain Web3 and DeFi high-return deals. The warning comes as a response to repeated patterns of fraudulent schemes that have raised concerns within the crypto market community. BIFA cautions investors against promotions of "stablecoin wealth plans" promising fixed returns, which the organization identifies as unlicensed operations and false guarantees.

BIFA's latest warning targets promotions of "stablecoin wealth plans," "Web 3.0 dividends," and similar offers that promise fixed returns. These activities, according to BIFA, include unlicensed operations and false guarantees. The organization cites past incidents involving high-profile cryptocurrency frauds such as PlusToken, which accumulated about 200,000 BTC and 9 million ETH, serving as a historical precedent to emphasize the risk. Current schemes targeting ETH, BTC, and stablecoins continue to pose potential risks.

The circular from BIFA outlines five hallmarks of illegal fundraising activities, aiming to educate investors against suspect schemes. These include using technical jargon to exploit information gaps and cross-linking to fraud. The Chinese crypto regulation environment emphasizes vigilance among investors, deterring risk participation in unlicensed investment schemes. While BIFA’s warning serves as a preventive measure, market trends will confirm its impact over upcoming weeks.

Should the current climate persist, heightened caution within crypto investments is expected, potentially affecting new stablecoin-related fundraising efforts. Historical patterns from cases like PlusToken underline the necessity for regulatory awareness. The warning from BIFA comes in the wake of past frauds, such as the PlusToken wallet service, which collapsed in 2019. The episode highlighted how promoters can move coins across exchanges and mixers before liquidation, making enforcement a multi-year pursuit.

Regulators in major cities have released consumer notices on token scams this year, reflecting the growing concern over illegal fundraising activities. The warning from BIFA is part of a broader effort to educate the public about the risks associated with unregulated investment schemes. The association published its hotline and encouraged investors to report any unlicensed activities to the police or financial supervisors. BIFA also stated that it will forward credible tips to provincial task forces that track unlawful public fundraising.

The warning from BIFA is timely, as retail speculation has accelerated on mainland social platforms. Market interest has also tracked incoming stablecoin rules, prompting local regulators to prepare enforcement actions. The association's statement underscores the need for vigilance and due diligence in the rapidly evolving world of DeFi and Web3 investments.