On July 9, 2025, the Beijing Internet Finance Industry Association (BIFA) raised a red flag for cryptocurrency investors. The organization released a public warning on its official WeChat channel, highlighting serious concerns about unregulated cryptocurrency activities, especially unauthorized fundraising schemes.
BIFA’s message marks another chapter in China’s ongoing effort to regulate the crypto space. The warning urged investors to remain alert, avoid risky behavior, and stay away from projects that operate outside the bounds of China’s legal and financial systems.
Why BIFA Issued This Warning Now
The recent surge in digital asset interest across Asia has attracted both genuine developers and bad actors. In China, regulators continue to take a firm stance on anything that threatens economic stability or public confidence.
BIFA explained that many crypto projects operate without licenses, often using complex technical terms to confuse and mislead investors. These projects target the uninformed public and often promise unrealistic profits. By exploiting knowledge gaps, these schemes can extract money from unsuspecting individuals under false pretenses.
BIFA’s July 9th statement came at a time when several local reports pointed to a rise in shady stablecoin offerings, false token launches, and hidden pyramid-style fund collections disguised as decentralized finance (DeFi) projects.
Five Key Warning Signs Highlighted by BIFA
To help investors identify and avoid fraudulent schemes, BIFA outlined five hallmarks of illegal fundraising:
1. Operating Without a License
Legal crypto activities in China must adhere to strict licensing rules. Any investment program or platform offering digital asset services without regulatory approval breaks the law. BIFA warned the public to verify whether a project holds the necessary licenses before committing funds.
2. Using Technical Jargon to Hide Risks
Many fraudsters use complex blockchain or cryptographic terminology to confuse investors. BIFA highlighted that these terms serve as a smokescreen. Investors must understand the basics of a project before putting in any money. If the project sounds too complicated, it likely hides something dangerous.
3. Offering False Guarantees
No legitimate investment guarantees profit, especially not in volatile markets like cryptocurrency. Scammers often promise stable returns, zero risk, or daily income. BIFA advised investors to treat such claims as major red flags.
4. Recycling Funds to Pay Early Participants
Some schemes use new deposits to pay older investors. This structure mimics a pyramid or Ponzi scheme. Once new deposits dry up, the entire system collapses. BIFA emphasized that genuine projects generate value through products or services, not through constant fundraising.
5. Links to Fraud, Scams, or Money Laundering
BIFA warned that illegal crypto operations often connect to broader financial crimes. These include fraud, identity theft, and money laundering. Investors who join such schemes could face serious legal consequences, even if they acted unknowingly.
Stablecoins and the Shadow of Past Scandals
BIFA paid particular attention to the stablecoin sector. These digital currencies claim to offer price stability, usually by tying their value to fiat money. However, regulators in China remain skeptical.
Scams involving fake stablecoins have fooled thousands of investors in the past. Authorities remember the PlusToken scandal, where fraudsters stole billions from retail investors. That scandal shook the crypto industry and pushed regulators to increase surveillance on digital assets.
BIFA stated that some new stablecoin projects show signs of fund recycling and deception. Without strict control, these tokens can turn into tools for scams. The public must stay alert and question the origin, backing, and use case of any stablecoin.
A Broader Look at China’s Crypto Policy
China has never treated cryptocurrency lightly. The government began restricting Bitcoin mining and trading years ago. Since then, it has increased its efforts to monitor digital assets and protect the yuan’s integrity.
China supports blockchain technology but rejects the speculative nature of unregulated crypto trading. Regulators fear that widespread illegal fundraising through digital currencies could harm the country’s economic order. They believe unchecked crypto activity creates financial instability, attracts fraud, and exposes investors to major losses.
BIFA’s warning fits into this bigger picture. It serves not just as a statement but as a signal of China’s long-term plan: to build a secure, controlled digital finance system while keeping fraud and volatility away from everyday consumers.
Public Reaction and Institutional Responsibility
Retail investors make up the majority of victims in crypto scams. BIFA’s warning directly addressed the public, urging them to remain cautious. However, the association also reminded institutions and retailers of their role in upholding financial discipline.
Financial institutions must perform due diligence before participating in any crypto-related partnerships. They must verify whether the technology behind a digital asset stands on solid ground. BIFA wants banks and fintech firms to support responsible innovation rather than chase fast profits.
Retailers, such as app developers or trading platforms, must also stay away from promoting tokens that operate outside legal channels. Failing to comply may lead to severe penalties.
Investor Advice: Stay Informed and Vigilant
BIFA encouraged individuals to conduct thorough research before investing in any cryptocurrency-related project. Investors must ask basic but essential questions:
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Who runs the project?
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Does it have a legal license?
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How does it generate profit?
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What happens if the platform shuts down?
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Is the technology transparent and verifiable?
BIFA made it clear that uninformed decisions could lead to complete financial loss. The association advised people to trust their instincts—if something sounds too good to be true, it likely hides a trap.
The lack of clear regulation in many crypto sectors creates opportunities for both innovation and exploitation. Until global or national standards mature, investors must rely on their own awareness and self-protection strategies.
The Role of Regulatory Warnings
BIFA doesn’t hold direct regulatory power like China’s central bank or securities commission. However, its voice carries weight in financial circles. As the official industry association in Beijing, BIFA works closely with regulators to guide the market’s direction.
Its warning acts as a public reminder of what the government considers unacceptable. It also acts as a soft enforcement tool—a way to educate and warn without launching immediate legal action.
By releasing the statement on WeChat, a platform used by millions, BIFA ensured that the message reached a broad audience. Investors, entrepreneurs, and institutions now understand that the authorities watch crypto activity carefully.
Conclusion: Risk Awareness in the Digital Age
BIFA’s July 9, 2025, statement stands as a clear message to crypto investors: stay informed, ask questions, and avoid risky schemes. China wants to build a safe digital financial future, but it refuses to tolerate illegal or deceptive crypto activities.
Investors must now take greater responsibility for their actions. Those who ignore legal requirements or skip due diligence face not only financial loss but also legal trouble.
By staying cautious and aware, investors can protect their capital, help stabilize the market, and support the growth of trustworthy blockchain projects. BIFA’s warning doesn’t aim to stop innovation—it aims to protect people from falling into traps in a rapidly evolving digital world.
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