The largest ponzi scheme in the world – both by asset volume and the number of victims – has just been broken up after interdiction from China’s authorities revealed fake peer-to-peer lending that fleeced investors in the region of 50 billion Yuan, or $7.6 billion. The arrests of senior executives at Ezubao, the Chinese firm alleged to have bilked nearly 900,000 customers, come as Chinese executives are being kidnapped at an increasingly alarming rate and regulators in the region are cracking down on fraud.

Forex Trader Ponzi Scheme China

Investors promised returns on peer-to-peer loans, but money went for gifts, cash, sources say

Ezubao promised investors what were generally above average investment returns, between 9% and 14.6%, while in actuality 95% of the investments listed on the site were false, according to a confession made by Yong Lei, the company’s risk controller, and reported by the Xinhua news agency. Like most peer-to-peer lending sites, the firm worked as a matchmaker connecting those in need of loans with investors looking for yield in a yield starved environment.

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