Beijing: A highly organised cyber fraud network in China is targeting people with promises of stock market investments and quick profits. In one case, a woman met an acquaintance during a square-dance session who claimed to be an experienced stock trader. The woman gradually gained the victim’s trust and persuaded her to prepare to invest 200,000 yuan, or around ₹28.3 lakh. A timely warning from China’s National Anti-Fraud Center and an in-person visit by police prevented the woman from becoming a victim of a major financial scam.
The victim said the fraudster initially started with casual conversations during the dance sessions. She asked about the victim’s family, age, employment and future plans while also sharing details about her own personal life. During their conversations, she claimed to have more than a decade of experience in stock trading and said she had recently earned strong returns. She then showed screenshots allegedly displaying high investment profits, further strengthening the victim’s confidence.
The conversation gradually shifted towards investment opportunities. The fraudster encouraged the victim to download a purported wealth-management app and claimed that investing 200,000 yuan would qualify her for additional benefits. The victim downloaded the app, registered an account and began linking her bank card. At that point, she received a warning call from the National Anti-Fraud Center. She initially did not take the warning seriously, but police later arrived at her home and explained that similar victims had already been targeted through fake investment platforms. She then realised that she had nearly fallen into a carefully planned scam.
Fake Investment Apps Used to Build Trust
Investigations indicate that illegal stock-recommendation and investment fraud is no longer the work of isolated individuals. Organised networks operate through separate teams responsible for lead generation, customer service, technical operations and fund transfers. Members of different teams may never meet physically and often coordinate entirely through online channels.
Lead-generation teams search for potential victims through social media posts, livestreams and short videos promoting supposedly high stock-market returns. Customer-service teams then maintain contact through private chats and groups to establish trust. Once the victim is convinced, they are directed to download a fake investment app. Technical teams operate the applications and servers, while fund teams move the money through bank accounts and other channels.
Fake trading applications are the central tool in these operations. Stock prices, account balances, profits and losses displayed inside these apps are not necessarily connected to the real stock market. Fraudsters can manipulate the backend data according to their requirements. During the initial stages, victims are shown attractive profits, encouraging them to invest larger amounts.
The Second Trap Begins When Victims Try to Withdraw Money
After a victim deposits a substantial amount, fraudsters may prevent withdrawals. They can demand additional payments in the name of taxes, processing charges or further investment requirements. If the victim refuses, scammers may threaten to freeze the account or confiscate the displayed profits. Eventually, the application may be shut down or the victim’s account may be locked.
Many of these fake platforms reportedly use servers, databases and domains hosted overseas. This can make it difficult for investigators to obtain transaction records, user information and backend activity.
Fraud Money Is Rapidly Split Across Multiple Accounts
Fraud networks generally do not keep stolen money in a single bank account for long. Once money is received from a victim, it can be rapidly transferred through multiple mule accounts, third-party payment channels and other financial routes. The funds may then move across regions before being transferred overseas.
Investigators have identified methods involving underground banking networks, virtual currencies and fraudulent cross-border trade transactions. Multiple layers of transfers make it difficult to identify the ultimate beneficiaries and recover the stolen funds.
China Cracked 258,000 Fraud Cases in 2025
China has continued large-scale enforcement against telecom and online fraud. In 2025, police across the country cracked 258,000 telecom and online fraud cases. A total of 542 financiers, masterminds and key operators involved in fraud networks were arrested during special operations.
During the same period, authorities blocked more than 3.6 billion fraudulent phone calls and 3.3 billion fraudulent text messages. Emergency measures were used to freeze 217.07 billion yuan, equivalent to around ₹30.7 lakh crore, in suspected fraudulent funds. Police and related agencies also conducted more than 6.747 million in-person visits to warn potential victims and prevent them from transferring money.
Experts warn investors to be particularly cautious about anyone promising guaranteed stock-market profits, principal protection or exclusive insider information. Requests to download unauthorised trading applications, transfer money to private accounts or conduct transactions outside legitimate exchanges should be treated as major warning signs. Independently verifying the platform, company, regulatory status and payment arrangements before investing remains one of the strongest safeguards against investment fraud.
