TechFlow news, December 14 — According to the Economic Observer, Yu Zhi Financial Co., Ltd., operating under the name "virtual asset copy trading," has been exposed for a "soft rug pull." The platform, through its virtual asset trading app HSEX and several other applications, promised investors a daily return of 1% and cumulative returns of up to 370.6% over 30 days, required users to recruit subordinates, and offered high referral rewards, forming a pyramid-shaped Ponzi scheme.
On December 8, investors received a notice requiring them to pay a "self-verification deposit" equal to 20% of their account balance in order to withdraw earnings, while withdrawal fees increased from 10% to 30%. The platform claims to have 3 million members; assuming a minimum investment threshold of 7,400 yuan, the scale of the fund pool could exceed 20 billion yuan.
The Office of the Joint Conference on Preventing and Cracking Down on Illegal Financial Activities in Xinyi City, Guangdong Province, has issued a risk alert, confirming that Yu Zhi Financial has not obtained any business license from national financial regulators and that its HSEX application has not been authorized or registered by any authority. The Hong Kong Stock Exchange has listed the company and its related applications as suspicious websites.
