The unmasking of a US$7.6bn fraud has rocked confidence in China's fast-growing internet finance sector as leading players line up to tap the public markets to fund their expansions. Last Monday, the state-run Xinhua News Agency reported that ezubo, a peer-to-peer lending company in Anhui, had conned investors out of over Rmb50bn (US$7.61bn) through a Ponzi scheme. According to Xinhua, nearly 95% of investment projects listed on Ezubo do not exist. Founded in July 2014, Ezubo (also transliterated as Ezubao) offered high interest rates of 9% to 14.6% to lure about 900,000 investors. It then paid off some investors in classic pyramid-scheme fashion until the authorities launched an investigation into the company last December after finding signs of tight cashflow.
展开▼
