JYS Group Collapses After $180M Crypto Scheme Fails

JYS Group, an investment firm based in Guangdong province, has collapsed after raising approximately $180 million for high-return investment schemes, including cryptocurrency. The firm's chairman, lin Chunhao, announced his departure from China via a WeChat group, stating that he had arrived in the UK following failed investments. Lin claimed personal losses exceeding $96 million and said all funds had been spent on interest payments, salaries, and operating costs.

JYS Group marketed its offerings by targeting retail investors through financial literacy seminars. Participants were offered high-yield products with annualized returns of 6% to 9% and maturity periods ranging from three to 36 months. Some were introduced to the schemes through family connections. The fund was raised from retail investors across several cities, including Shenzhen, Guangzhou, Foshan, and Zhongshan. The products were managed by Shenzhen Haiboxin Project Management Co., Ltd., which promoted itself as affiliated with state-owned firms. Investigations later revealed shared offices and personnel with JYS, casting doubt on its claims of independence.

Offices in Shenzhen and Zhongshan were found shuttered, and local authorities have begun investigations. The Shenzhen Public Security Bureau’s Economic Crime Investigation Division is leading the inquiry. Some investors increased their exposure to jys group under pressure from sales agents, with some people committing over $80,000. The company collapsed within two months of these investments. By the time investors realized the risks, many of the agents who had encouraged their participation could no longer be reached.

While investors were initially told their funds were backing municipal infrastructure projects, such as roads and tunnels, Lin provided no evidence to support these claims in his final statement. Lin’s farewell message referenced failed ventures but did not mention any specific infrastructure assets. Instead, it listed a string of unsuccessful investments across sectors, including peer-to-peer lending, crypto trading, and stock speculation. According to a financial breakdown shared in the message, losses spanned multiple areas: nearly $10 million each from bad debts, failed crypto trades, and promissory note defaults.

Ask Aime: What caused the collapse of JYS Group and how did it affect retail investors?

The collapse of JYS Group points to a broader vulnerability in the investment sector, where financial products like crypto that are marketed as secure and high-yield often operate with little oversight. Despite repeated warnings from regulators, schemes continue to attract middle-class investors drawn by promises of above-market returns. Quasi-financial entities often operate in grey areas under the guise of “project management” or education services, avoiding immediate scrutiny unless complaints or collapses trigger investigations. Red flags include high promised returns, pressure from sales agents, and a lack of independent third-party auditing. Regulatory registration alone isn’t sufficient proof of legitimacy. Cross-border recovery is notoriously difficult. Unless formal extradition treaties and asset recovery channels are in place, investors often face years of legal limbo with little prospect of compensation.