Authorities in eastern China have detained 11 investors after protests erupted over the collapse of the country’s latest Ponzi scheme, dubbed “money treasure online”.
Police in Nanjing said they detained the investors and warned another 11 for organizing illegal gatherings and disturbing public order, the city’s public security bureau said in a statement posted to its Weibo account.
The Ponzi scheme — called qbao.com or “money treasure online” — took in billions of yuan from millions of investors with authorities estimating it owed 30 billion yuan ($4.7 billion) at the time of its collapse last month.
Investors were wooed with promises of returns as high as 60 percent. They were asked to do small “work” tasks on qbao.com’s website.
Some of the tasks required users to watch qbao.com’s advertising videos, which could take just minutes each day.
“Users were lured in by high returns for completing advertising tasks,” qbao.com’s website now displays in a bright blue notice that authorities have swapped in for its original page.
The company took in new users’ money to repay old users, the notice says, citing the Nanjing police department.
Users were also encouraged to invest large amounts of money in Qbao’s wealth management products, like one that required an investment of 200,000 yuan for three years for a return of 1.44 million yuan, state news agency Xinhua reported on Thursday.
The founder of the scheme, Zhang Xiaolei, turned himself into authorities last month when he found the company unable to continue payouts.
“I’m deeply sorry to investors for the losses I have caused,” Zhang wrote in a statement reposted by Xinhua.
“We took in money from investors borrowing new money to repay old. Now we can’t repay the principal or interest.”
Zhang said the company had one million active users as of last month.
Since Zhang’s arrest and state media giving primetime coverage to the case, bilked investors have taken to organizing small-scale protests, with some calling on authorities to release Zhang and let the company continue operating.
Other investors say they just want justice, with dozens chanting “yaofan”, meaning “we want food” or “we want money” during the Nanjing protests, videos show.
Qbao.com had centered its operations in Nanjing, where authorities announced they had detained protesting investors.
Similar investor protests have followed the collapse of other Ponzi schemes in China, such as the end of peer-to-peer investment platform Ezubao in 2016.
The online firm bilked 900,000 investors out of $7.6 billion — among the biggest financial frauds in recent history