China Warns of 100% Risks in Unregulated Crypto Activities

Beijing’s Internet Finance Industry Association (BIFA) issued a warning on July 9, 2025, highlighting the risks associated with unregulated cryptocurrency activities, with a particular emphasis on unauthorized fundraising. The warning underscores China’s regulatory focus on deterring illegal crypto activities to protect economic order and public interest.

BIFA’s statement, released on their WeChat channel, calls for investor caution, particularly regarding projects that operate without a license and use technical jargon to exploit information gaps. The association warns about the dangers of fund recycling and potential cross-links with fraud, aiming to deter unauthorized investment schemes. Investors involved in such schemes face potential financial repercussions, as China’s regulations warn. The stablecoin sector has historically seen increased scrutiny due to previous large-scale scams.

BIFA outlined five hallmarks of illegal fundraising: operating without a license, using technical jargon to amplify information gaps, issuing false guarantees, recycling new deposits to pay earlier participants, and cross-linking into fraud or money laundering. These warnings align with China’s history of stringent crypto controls and efforts to mitigate financial risk across digital asset markets. Retailers and institutions are urged to be vigilant in current market conditions.

China’s regulatory stance on cryptocurrencies has been shaped by past events such as the PlusToken scandal, which highlighted the need for heightened regulation. BIFA’s caution serves as an ongoing reminder of the regulatory intent to curb illicit activity and protect market integrity. The warning also reflects the broader regulatory landscape in China, where the government has implemented strict measures to control and monitor financial activities. This approach is designed to prevent financial instability and protect the interests of investors.

Investors are advised to exercise caution and conduct thorough due diligence before engaging in any cryptocurrency-related activities. The lack of regulatory oversight in the cryptocurrency market means that investors may face significant risks, including the potential for fraud and financial losses. By heeding the warning from Beijing, investors can better protect themselves from the pitfalls of unregulated digital currencies and make more informed investment decisions. The emphasis on vigilance and the deterrence of risk participation in unlicensed investment schemes reflects the government's proactive stance in managing the financial sector.