China’s P2P sector was born during a wave of deregulation that spawned the nation’s shadow banking system. Crowdfunding Portals

China’s peer-to-peer (P2P) industry, much like payday lenders in the United States, has provided a valuable lifeline for some of the country’s most vulnerable consumers and small businesses that have had trouble accessing the traditional banking system, although it only accounts for a small portion of total borrowing in the country.

Digital Assets Insider® Police said they had received an abnormally large number of complaints about Hangzhou-based 51 Credit Card, which started as an online credit-card management platform and expanded into the P2P business. It had also acquired around $150.5 billion in debt outstanding, before the nation’s authorities began to launch investigations after numerous reports of fraudulent activities. Shares of the Hong Kong-listed firm surged as much as 30.5% as the stock resumed trade on Tuesday, having plummeted 35% on Monday morning before being suspended as news broke of police raids. While the government has focused so far on the industry’s debts, the probe into 51 Credit Card suggests authorities may be turning their attention to how such businesses are managed.

The P2P crisis in China is largely seen as a direct result of inadequate supervision by regulators, sources say. “According to a preliminary investigation, 51 Credit Card entrusted third-party debt collecting services that pretended to be from the government, and used intimidation and nuisance tactics to collect debts,” Hangzhou police said in a post on their official Twitter-like Weibo account. Savers who invested in the thousands of now-defunct P2P platforms over the last several years have not yet managed to recover their funds. Bank of India Postpones Plans to Launch New Physical Branches as More Consumers Using Digital Bankin... Bank of Montreal Introduces AI enhanced Feature for Identifying Potential Cash Shortfalls for its Fi... Italy based Banking Challenger Aidexa Secures €45 Million in Funding via Seed Round. Submit a Tip Latin America Needs Strong Fintech Regulatory Framework, Institutional Support before It Can Effecti... Fintech Firm Afterbanks, which Aggregates Data from Banks in Real-Time, Launches Operations in Mexic... Cryptocurrency Exchange OKCoin Confirms it will Support Upcoming Bitcoin Cash (BCH) Hard Fork. New restrictions were introduced, including bans on accepting public deposits, providing guarantees for lenders, and selling financial products.

P2P platform Ezubao was labelled a Ponzi scheme after it funnelled investor funds into fictitious projects.

Sun and Chief Financial Officer Zhao Ke were assisting the police investigation along with other employees, the company said in a stock exchange statement on Tuesday.

Crowdfund Insider The goal is to repay depositors as much money as possible,” he said. In China, P2P platforms comprise one of the riskiest and least regulated slices of the system.

In early January, authorities in Shanxi Province reportedly shut down 26 P2P firms, according to state-run Xinhua. Meanwhile, local media outlets are discouraged from reporting on the losses suffered by investors in China’s P2P lending crackdown, leaving investors with little information about any recovery efforts made by regulators. © 2020 Crowded Media Group. According to a report from Action Fraud, victim losses due to the fraudulent activity related to the Coronavirus (COVID-19) in March 2020 were nearly £970,000 (in the United Kingdom). Just last month, the SCMP reported that authorities were investigating microloans provider Weidai (Hangzhou) Financial Information Service for alleged illegal fundraising activities.

Multiple companies were said to have applied. Recent reports indicate the CBIRC was accepting applications from local asset managers looking to focus on resolving bad P2P loans. Crowdfunding Guide Following mounting arrests, frauds and shutdowns at P2P platforms, regulators last November introduced a licensing process for the remaining operators, subjecting them certain restrictions on business scope and requirements to set aside risk reserves and loan loss provisions. The number of P2P lenders operating in China has been reduced from about 6,000 to only 29, following the government-led crackdown. China has been conducting extensive investigations into the operations of P2P lenders because there have been many fraudulent schemes carried out by scammers exploiting the emerging sector. CI on Twitter CI on Telegram, Categories In 2016, the first arrests at a P2P lender were made. China’s Supreme Court on Monday warned that individuals and organisations making illegal loans faced jail time.

Copyright © 2018 inAsia Media Pte Ltd, 51 Goldhill Plaza, #07-10 Singapore 308900 (Company no. According to Guo, the crackdown on the P2P sector has had the desired impact and it will be eased by the end of the year. In April 2020, UK-based P2P lender and digital bank Zopa warned that scammers have been taking advantage of the current situation.

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Company Chairman Sun Haitao issued an apology on his Weibo account, saying he had “done harm to certain borrowers”.

They also found 15 other non-compliant P2P businesses which are required to exit the market by June. The number of P2P lenders operating in China has been reduced from about 6,000 to only 29, following the government-led crackdown.

If this prediction is true, within the span of two years China’s P2P industry will have shrunk by 85%. C/O Crowded Media Group, LLC Real Estate The crackdown by the authorities has …

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