Regulators Shut 4th P2P Lending Platform This Year After Customers Unable to Withdraw Cash

A week ago the authorities shut down an online lending platform. See: ￥80 Billion, 3-Year Old Online Lending Platform With 10 Million Users Implodes, May Be Ponzi. Now another, the 4th this year, has been "annihilated." All four of the site in question used high rebates that give off a distinct whiff of Ponzi, with annual returns far above what is offered by high-yield WMPs. This latest firm (联璧金融, translated by Google as United Finance below) had high rebates, free iPhones instead of interest and also scratch codes on products such as a router.

iFeng: 又一家爆雷 民间四大高额返利平台全军覆没！

Some investors told reporters that after Jingdong Mall, investors purchased a Kyeonsi K2 router for 399 yuan. Each router has a K code attached to the bottom of the router. After scraping the bottom coating to obtain the K code, download and register the financial app. Login, enter the K code in the APP into the financial coupon exchange port to activate the K code, you can get 399 yuan financial wealth. You can withdraw cash after one month and you can get the corresponding interest.

In Fiji's 0-yuan purchase, in addition to routers, there are purifiers, sweeping robots, and wristbands. The higher the price is, the higher the cashback period will be. The longest is 12 months. The reporter noted on the United Financial App that in the $0 iPhone model, as long as investors invested nearly 370,000 yuan to buy wealth management products, they could get one for the iPhone and get their principal and interest back after 90 days expired.

Why would a finance firm put scratch codes on routers? Did a technology firm report strong sales one quarter...? The free iPhone doesn't strike as fraudulent assuming its a newer phone. The interest rate is actually a bit on the low side.

The four major private high return platform army out of the bottom financial platform zero yuan to buy high rebate mode

Another high rebate platform "burst." Recently, it was reported that due to illegal fund-raising investigations by the Shanghai police, United Finance has been investigated and many criminal suspects have been subject to criminal compulsory measures.

At this point, Qianbao.com, Yatang Finance, Tang Xiaoxuan, and U-Finance’s four private high-flyback platforms were “annihilated”.

China Securities Journal reporter learned from the survey that the high rebate platform generally promises ultra-high yields and zero risks. It encourages other people to join and promise high rewards to attract investors. Investors, due to their lack of awareness of risk prevention, lack of understanding of financial product risks, serious speculative psychology, and many investments after being attracted by high rebates.

According to industry insiders, most high-return platform platforms have relatively low compliance, and the level of information disclosure is poor or seriously missing. At the same time, product online, such as part of the platform does not have a clear direction of investment, but also because of the large number of investors, the distribution of the country, the platform funds are hidden, the supervision is more difficult. It is recommended that investors appropriately reduce the expected earnings of wealth management products and be vigilant against wealth management products and investment companies that promise high returns.

Senior executives are investigated

Recently, Shanghai Lianhe Electronic Technology (Group) Co., Ltd., the operating entity of Lianhe Finance, one of the four high-return platforms, was placed on record by the public security department on suspicion of illegal crimes. The relevant senior executives were taken away to assist in the investigation.

According to the Shanghai Municipal Public Security Bureau Songjiang Branch announced on the official WeChat on June 23, Shanghai Songjiang Branch of the Public Security Bureau recently received reports from the masses that the relevant personnel of Shanghai Lianhe Electronic Technology Co., Ltd. were suspected of committing crimes. The Songjiang police have registered for investigation. At present, 15 criminal suspects such as Zhang have been taken criminal compulsory measures according to law and the case is under further investigation.

According to information from the official website of United Finance, Luen Yu Technology was established in 2012 with a registered capital of 100 million yuan. It was the operator who proposed the scenario solution for the Internet as a whole. In 2014, it established the establishment of the Internet Finance Division and invested in R&D to develop the Internet financial platform. The WeChat version of the wealth management platform “Lianlai Wallet” and the APP product “Lianyi Finance” were born.

The immediate cause of the investigation of the joint venture technology was the difficulty in the withdrawal of the recently discovered joint-finance platform. The reporter learned that starting from June 20th, some investors found that the joint financial APP client could not perform normal cash withdrawal, and some showed zero balance, triggering investor rights protection.

With regard to the difficulty of cashing out, APP's customer service has once responded that due to the impact of the Internet financial environment, the recent phenomenon of centralized payment by financial users is more serious. It does not rule out a malicious run, and will follow up with the regulatory authorities to solve the current problems. Progress will be unified at 3 pm on June 21.

However, from the afternoon of June 21st to evening, United Financial did not announce the redemption plan on time. On the same day, Shanghai Songjiang Branch of the Public Security Bureau announced that according to the investor's report, the investigation of Shanghai Songjiang Lianhe Finance's illegal absorption of public deposits had been filed. The case is currently under investigation. With regard to the latest developments in the case, the reporter contacted Union Financial. As of press time, Lianhua Finance Customer Service Hotline has been unanswered.

At this point, Qianbao.com, Yatang Finance, Tang Xiaoxuan and Lianhe Finance have all “thunderbolted” the platform. All of the reasons for “explosion” are due to overdue payments or business failures. In this regard, there are informed sources, the high back to the platform continuous "explosion of the thunder", may be caused by the investor panic and appear to pay cash. In addition, false labeling by the platform may also be an important reason.

According to Wang Minguang, a partner of Zhejiang Jinzhong Law Firm, the problems of high rebate platformare unending, mainly because the annual return on investment given by the platform is too high, so that the platform must use new debt to fill in old debts, plus the risk assessment system is not done well, bad debts are constantly appearing and cannot be recovered within a short period of time. In the event of an investor’s run, the platform will inevitably collapse.

A warning for investors:

After the high rebate platform “bursts”, how to safeguard its own rights and interests has become a major concern for investors. Fu Weigang said that there is little difference between rights protection and other civil disputes. It is almost impossible to return the principal too hard.

"Although all investors are propagating investors to distinguish whether the platform is good or bad, many investors still use interest as their primary criterion and believe more in advertisements." Wang Yi, a senior partner of Guangdong Huashang Law Firm, suggested that investors safeguarding their rights cooperate with the public security authorities. Submit evidence and declare your claims.

Xu Feng said that investors can collect reliable and available information on the flow of platform funds, take different measures according to the nature of the business model of the platform, and retain individual investment evidence to provide legal basis for compensation and other ways to safeguard their legitimate rights and interests.

Wang Minguang suggested that if the high-return platform is due to the “explosion” caused by poor platform operations, the platform often has real projects, but the profits generated by the project cannot cover the operating costs. At this time, investors should select representatives to actively negotiate with the top level of the platform, request the platform to hire an accounting firm to perform financial audits of the platform, sign reasonable payment plans with relevant person in charge of the platform according to the financial status of the platform, and hire a law firm at the same time. Provide legal services for the healthy exit of the platform to protect the maximization of investors’ rights. If the high rebate platform is triggered by high-level misappropriation of funds for personal squandering, the relevant person in charge constitutes a fund-raising fraud, so investors must promptly The police let the public security authorities verify the whereabouts of the funds and preserve the assets of the platform. Investors must actively cooperate with public security agencies at this time. If necessary, they can hire lawyers to initiate criminal incidental civil lawsuits to protect their legal rights to the greatest extent possible.