Ezubao

Ezubao was a Chinese peer-to-peer (P2P) lending platform that was exposed as a massive Ponzi scheme in late 2015. It falsely advertised high returns to investors while actually using new investments to pay off older ones, and fabricating most of the projects listed on the platform.

The platform, operated by Anhui Yuchen Group, promised investors annual returns of between 9% and 14%. However, authorities later found that approximately 95% of the investment projects listed on Ezubao were fake. The company’s executives fabricated these projects to attract investors and funnel money into their own pockets.

In December 2015, Chinese authorities launched an investigation into Ezubao. In February 2016, the investigation concluded, revealing the scale of the fraud. Authorities found that Ezubao had defrauded over 900,000 investors out of more than 50 billion yuan (approximately $7.6 billion USD at the time).

The Ezubao scandal shook China's P2P lending industry and led to increased regulatory scrutiny. Many executives of Anhui Yuchen Group, including its chairman Ding Ning, were arrested and subsequently convicted of fraud and other crimes. The scandal highlighted the risks associated with unregulated or poorly regulated P2P lending platforms and led to stricter rules governing the industry in China. The incident also served as a stark reminder of the potential for financial fraud and the importance of due diligence for investors.