Core Viewpoint - The "Yuzhi Financial" virtual currency investment platform has collapsed, leading to significant losses for investors despite prior warnings from regulatory authorities about the illegality of virtual currency activities [1][24][45]. Group 1: Platform Operations and Structure - "Yuzhi Financial" claimed to offer a high annualized return of 360% by utilizing a "6G Hongmeng System" developed in collaboration with Huawei, which was presented as a tool for real-time trading signals [3][27][30]. - The platform's promotional materials falsely stated that it was listed on the "Hong Kong Equity Trading Display Center" under the stock code HK31919, which was later found to be untrue [4][27]. - The platform employed a multi-level distribution system, incentivizing users to recruit new members, which contributed to its rapid user growth and the formation of a large-scale scam network [31][33]. Group 2: Investor Experiences and Losses - Many investors reported being unable to withdraw their funds, with one investor stating that she was unable to retrieve her money after being encouraged to reinvest during a promotional event [1][25][36]. - The platform attempted a "second harvest" by requiring users to pay a "self-certification deposit" of 20% of their total assets, locking their funds for 60 days while only allowing minimal withdrawals [2][12][41]. - Despite recognizing the signs of a scam, some investors continued to invest due to the allure of recovering their initial investments, demonstrating a common psychological trap among victims [26][41]. Group 3: Regulatory Context and Challenges - The collapse of "Yuzhi Financial" occurred amid intensified regulatory efforts in China to combat virtual currency risks, with the People's Bank of China reiterating that virtual currencies do not have legal status and are illegal financial activities [21][45]. - Local governments had issued warnings about the platform prior to its collapse, indicating that it lacked the necessary financial licenses and had not registered its app [22][46]. - Regulatory challenges persist as new types of Ponzi schemes often operate offshore, making it difficult to enforce laws and recover funds [47].

Core Viewpoint - The article highlights the collapse of a virtual currency investment platform named "Yuzhi Financial" amid increasing regulatory scrutiny in China, leading to significant investor losses due to its fraudulent operations [1][12]. Group 1: Platform Operations and Fraud Mechanism - "Yuzhi Financial" lured investors with promises of high returns, claiming annualized yields exceeding 360% through a complex multi-level distribution system [5][6]. - The platform employed tactics reminiscent of Ponzi schemes, using funds from new investors to pay returns to earlier investors until the financial chain broke [1][6]. - Despite the platform's collapse, it attempted a "second harvest" by requiring users to pay a "self-certification margin" of 20% of their total assets, locking their funds for 60 days [2][8]. Group 2: Misleading Claims and Technology Use - The platform falsely claimed to have developed a "6G Harmony System" in collaboration with Huawei, misleading investors about its technological capabilities [3][10]. - It also misrepresented its status by claiming to be listed on the "Hong Kong Stock Exchange" under a fictitious stock code, which was not found on official records [4][11]. Group 3: Regulatory Context and Warnings - The collapse occurred against a backdrop of intensified regulatory measures against virtual currencies in China, with the People's Bank of China reiterating that such activities are illegal [12][14]. - Local governments had issued warnings about "Yuzhi Financial" prior to its collapse, indicating it was operating without the necessary financial licenses [12][14]. Group 4: Investor Behavior and Psychological Factors - Many investors, despite recognizing the risks, continued to invest due to the allure of recovering their initial investments, demonstrating a gambler's mentality [14]. - The rapid spread of such scams is facilitated by the public's blind trust in high-tech claims and the allure of quick profits, which diminishes rational judgment [10][11].

Core Viewpoint - The article highlights the collapse of a virtual currency investment platform named "Yuzhi Financial," which operated under the guise of high returns and advanced technology, ultimately leading to significant investor losses due to its fraudulent practices [1][4][27]. Summary by Sections Platform Operations and Fraudulent Practices - "Yuzhi Financial" promised investors a staggering annualized return of over 360% through its so-called "6G Hongmeng System," which was falsely claimed to provide real-time trading signals [5][24]. - The platform employed a Ponzi scheme structure, using funds from new investors to pay returns to earlier investors, leading to its eventual collapse when the funding chain broke [1][10][12]. Investor Experiences - Many investors, lured by promises of high returns, found themselves unable to withdraw their funds as the platform entered a "runaway" state, with reports of users being unable to cash out their investments [1][2]. - A notable tactic involved the platform's "leader" demanding a "self-certification deposit" of 20% of total assets from users, further locking their funds for 60 days under the pretense of maintaining platform health [2][21]. Marketing and Recruitment Strategies - The platform utilized a multi-level distribution system disguised as investment opportunities, incentivizing users to recruit others, which accelerated the spread of the scam [7][10]. - Promotional materials claimed a user base of 3 million, a figure that lacked substantiation and was likely inflated to attract more investors [7][10]. Regulatory Context and Challenges - The collapse occurred against a backdrop of intensified regulatory scrutiny on virtual currencies in China, with authorities reiterating that such activities are illegal and pose significant risks [27][28]. - Despite clear warnings from regulatory bodies, the platform continued to operate, exploiting loopholes and the lack of effective enforcement against such schemes [30]. Psychological Factors and Investor Behavior - The article notes a concerning trend where investors, even after experiencing losses, continue to seek new investment opportunities in similar schemes, driven by a gambler's mentality [30].