Chinese regulators launched a website on Saturday to aid authorities in their mission to investigate the gigantic Ezubao “Ponzi scheme” that allegedly stole money from more than 900,000 investors.
Ezubao, China’s largest peer-to-peer lender, was caught red handed fabricating the majority of its listed investment projects and using investor money to fund the extravagant lifestyle of the company’s executives earlier this month.
The website, set up by the Ministry of Public Security, is designed to enable defrauded investors to register their details with the hope that it will assist authorities to further investigate the scam, and other dodgy fund-raising schemes that are occurring in the market.
You can’t blame Chinese investors for throwing their money at the Ezubao investment offering, the ‘loosely regulated’ Chinese online alternative finance sector coupled with the incredibly low Chinese savings deposit rate and heavy restrictions on international investments no doubt encourages investors to look for alternatives to the standard (and safer) investment options. These factors may also explain why the China Banking Regulatory Commission unveiled new draft online lending rules late last year. Perhaps a tad late to the party given the need for a scam reporting website?