Core Viewpoint - The surge in gold prices has created investment opportunities but also increased the risk of investment scams, particularly highlighted by the case of Yongkun Gold, which has left many investors in financial distress [1][3][5]. Industry Summary - The World Gold Council reported that domestic investors purchased approximately 124 tons of gold bars and coins in the first three months of the year, marking a 12% year-on-year increase, significantly outpacing investors in other countries [1]. - The rise in gold prices is attributed to various global economic factors, including trade tariffs and geopolitical conflicts, which have made gold a preferred investment during economic uncertainty [6][8]. - Domestic investors are increasingly turning to gold as a stable investment option, especially as real estate loses value and stock markets remain volatile [8][9]. Company Summary - Yongkun Gold, founded in 2014 by financial analyst Wang Guohai, operated both an online platform and physical stores, gaining investor trust due to its perceived stability and past recognition for preventing fraud [11]. - The company recently froze all accounts and closed its physical stores, leaving investors unable to access their funds, which has raised concerns about its operational integrity [3][5][12]. - Yongkun Gold's investment promises included high annual returns and a buyback guarantee, which many investors found appealing, but these claims have been revealed as misleading, leading to significant financial losses for investors [14][17].

Core Viewpoint - The article discusses the collapse of Yongkun Gold, a well-established gold retail chain in China, which led to significant financial losses for investors due to its fraudulent practices [4][34]. Company Overview - Yongkun Gold operated 23 stores across Zhejiang, Anhui, and Shandong, attracting local investors due to its long-standing presence and physical locations [2][4]. - The company offered various gold-related services, including gold purchase, custody, and high-interest returns on investments, which lured many customers [6][9]. Business Model - Customers could buy gold but did not receive physical gold; instead, it was held in custody by Yongkun Gold, promising high annual interest rates between 6.5% and 10% [7][9]. - A contract clause required customers to pay a 5% custody fee if they did not fulfill the agreement, leading many to never see the physical gold they purchased [11][28]. - Yongkun Gold also operated an online platform, Yongkun Mall, where customers could pre-order gold and receive refunds if prices fell, further enticing investors [13][16]. Incident of Collapse - On May 20, 2025, all withdrawal services ceased, and the 23 stores closed, resulting in significant financial losses for investors, with estimates of losses reaching around 4 billion [28][30][32]. - Customers discovered that they could not retrieve their gold or cash from the online platform, leading to widespread panic and realization of the fraud [30][34]. Legal and Insurance Aspects - Victims sought compensation through insurance, but the policies only covered specific disasters like earthquakes or fires, leaving them without recourse for their losses [33][34]. - The incident has drawn attention from law enforcement and media, with investigations underway to address the fraudulent activities of Yongkun Gold [34][35].