Recently, China’s well-known “Internet + gold + finance” investment service provider, Yongkun Holdings Limited, has been reported to have suddenly closed its stores, sparking panic among tens of thousands of investors who are now left with no way to seek compensation. Hangzhou police have initiated an investigation into Yongkun Holdings for allegedly illegally absorbing public deposits, exposing a fundraising scam disguised as a gold investment scheme that could result in the disappearance of billions of yuan, leaving tens of thousands of people empty-handed.
Since the end of May, social media has been flooded with complaints from investors in Zhejiang, Shandong, Fujian, Jilin, and other regions, who have invested millions or even tens of millions of yuan in gold with Yongkun Holdings Limited in Zhejiang but are now unable to withdraw their investments. The customer service phone of Yongkun remains unanswered.
According to the information on the company’s official website, Zhejiang Yongkun Holdings Limited was established in 2014 with a registered capital of 102 million yuan. It claims to be a comprehensive investment service provider in the domestic “Internet + gold + finance” precious metals industry, owning five major brands including Yongkun Supply Chain and Yongkun Gold.
According to reports by multiple mainland Chinese media outlets, over the past decade, Yongkun Holdings has opened more than 50 stores across the country bearing the “Yongkun Gold” sign, with advertisements even appearing in the Hangzhou subway.
However, on May 22nd of this year, the Shangcheng District Branch of the Hangzhou Public Security Bureau issued a notice of investigation, alleging that personnel related to Yongkun Holdings were suspected of illegally absorbing public deposits, leading to an investigation by the public security authorities. On the day of the investigation, the freight elevator corridor in Yongkun Holdings’ headquarters in Hangzhou was sealed off, with a seal on the door. On May 23, the Shangcheng District Market Supervision Administration in Hangzhou also listed the main company of Yongkun Gold and its parent company as operating abnormally.
Following the outbreak of the case, several victims disclosed in interviews that, based on their preliminary estimates, the number of victims in this case could reach tens of thousands, although the exact figure is still under investigation.
Many interviewed victims revealed that they trusted Yongkun Gold mainly because of repeated recommendations from “acquaintances.” A family member of a victim in Heze, Shandong, mentioned that Yongkun’s salespersons would often visit them with gifts like oil and rice, promoting their high-yield gold products.
In addition to the gift strategy, Yongkun Holdings had fulfilled high-yield promises over the past decade, regularly depositing both the principal and returns into investors’ accounts on time. This appearance of “high rebates” stability lured various groups such as the displaced in Zhejiang, business people, employees of state-owned enterprises, and the elderly into this gold investment scheme under the guise of time, and as time passed, they became more deeply involved.
However, on May 21 of this year, many investors discovered that their assets held with Yongkun Holdings could no longer be redeemed, and the company’s founder, Wang Guohai, was subsequently accused of embezzling funds and fleeing overseas. Several victims described that when they angrily reported to the police, initially believing they were the highest victims of deception, they soon found out that “people who were defrauded of four to five million or ten to twenty million are everywhere.”
As the number of victims continued to grow, they also raised more doubts when gathered together: How did Yongkun Holdings explode? Have they transferred a large amount of assets? Moreover, should the multiple insurance companies that previously provided coverage for the gold purchased from them be held accountable now? The most pressing question touching investors’ hearts is, whether Yongkun’s claimed gold custody business actually holds real gold? Is the gold that investors believed to be their own, real gold or just numbers on an online app? Is this another “Ponzi scheme” or “gold slaughtering plot”?
Many investors who have spoken out on social media have stated that they have received calls from the police, indicating that the case is still under investigation.
Yongkun Holdings had previously promoted itself as a member of the China Gold Association, a cooperative unit of the Shanghai Gold Exchange, and an outstanding financial enterprise in Zhejiang Province. These official backgrounds, long years of operation, and a nationwide retail scale had led many investors to trust Yongkun Gold blindly and pour in substantial amounts of funds.
In fact, instances of jewelry stores or gold investment platforms suddenly closing and fleeing, leaving customers with no means of compensation, have occurred before in China. In March of last year, several franchises under Shandong Gold and China Gold also closed unexpectedly, causing accumulated losses exceeding 400 million yuan. The explosion of Yongkun Holdings this time serves as a reminder to the public to stay vigilant when facing high-yield investment products, and to be wary of similar “gold scams.”