China toughens war on financial scams

SHANGHAI: China has ramped up a crackdown on financial scams, from cryptocurrency swindles to bogus patriotic fundraising that capitalizes on the coming 100th birthday of the ruling Communist Party, as new antifraud rules take effect on Saturday. In recent years, China has shut roughly 6,000 peer-to-peer (P2P) platforms in a purge of an industry that still owed victimized investors over $100 billion as of last August.

But financial frauds are mutating in their complexity and widening, according to China's banking regulator, which last week called for a tougher crackdowns Last year, China busted over 7,500 financial scams, according to the regulator, up 27% from the previous year. The clampdown on swindlers comes as rules combating illegal fundraising come into force on May 1, putting the onus on local officials to kill off investment scams at an early stage, said a local financial regulator who attended several mobilization conferences this week.

"Previously, you asked victims to go to court. Now, victims can bring officials to court for negligence of duty," said the official, who is not authorized to speak to the media and declined to be identified. The crackdown is also aimed at ensuring social stability ahead of the July 1 party anniversary, a highly sensitive event, the official said. In Shanghai alone, more than 20 platforms had been crowdfunding for alleged "red" movie and TV programmes dedicated to the political event, which is not allowed without government consent.