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Promote financial literacy and stay away from illegal fundraising.
Release time:
2025-09-19
What is illegal fundraising?
Illegal fundraising is a criminal activity. (According to the “Notice on Addressing Issues Related to the Prohibition of Illegal Financial Institutions and Illegal Financial Activities”), it refers to the act by an entity or individual—without obtaining approval from the relevant authorities in accordance with statutory procedures—of raising funds from the general public by issuing stocks, bonds, lotteries, investment fund securities, or other debt instruments, and promising to repay the principal and pay interest or provide returns to investors within a specified period, either in currency, in kind, or through other means.
Characteristics of Illegal Fundraising
Illegality: Raising funds without obtaining legal approval from the relevant authorities or by disguising such activities as legitimate business operations; Publicity: Publicly promoting the scheme through media, promotional events, flyers, text messages, and other channels; Inducement: Promising to repay principal and interest or provide returns—in cash, in kind, or in other forms—within a specified period; Social nature: Soliciting funds from the general public—the public at large and unspecified individuals.
Common methods of illegal fundraising
I. Promising high returns
Some participants in pyramid schemes and illegal fundraising, in order to meet or boost their performance targets, do not hesitate to exploit familial and regional ties, fabricating lies about earning high returns to entice relatives, friends, classmates, or neighbors into joining. As a result, the number of participants spreads rapidly, and the scale of the fundraising continues to expand.
II. Fabricating False Projects
Most criminals register legitimate companies or enterprises, using pretenses such as responding to national industrial policies and promoting entrepreneurship and innovation to concoct various fraudulent projects. Some even organize free tours and study visits to gain the trust of the general public.
III. Creating momentum through false advertising
Illicit actors often spare no expense in their promotional efforts, hiring celebrity endorsers and enlisting the support of famous figures; placing advertisements on major radio and television stations, online platforms, and other media; publishing exclusive interviews in renowned newspapers and magazines; employing people to widely distribute promotional flyers; and making social donations—all in an effort to create a false sense of momentum and hype.
4. Lure with familial affection
Some participants in pyramid schemes and illegal fundraising, in order to meet or boost their performance targets, are willing to exploit familial and regional ties, fabricating lies about high returns to lure relatives, friends, classmates, or neighbors into joining. As a result, the number of participants spreads rapidly, and the scale of fundraising keeps expanding. The forms of fraud are diverse and ever-changing. Please safeguard your own “wallet,” enhance your risk awareness, and don’t give scammers any chance to take advantage of you!
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