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Investors Call Cops as Nanjing Internet Finance Firm Freezes Deposits

Internet finance firm Xiaosheng Youfu imitated the model of its competitor Qianbao, including promotions to attract new users. Xiaosheng Youfu created a point-based system in which users who put in a minimum of 199 yuan would earn a higher ranking and therefore greater interest payments. Photo: IC
Internet finance firm Xiaosheng Youfu imitated the model of its competitor Qianbao, including promotions to attract new users. Xiaosheng Youfu created a point-based system in which users who put in a minimum of 199 yuan would earn a higher ranking and therefore greater interest payments. Photo: IC

Users of a Nanjing-based internet finance company have been scrambling to cash out after getting spooked by the collapse of its peer Qianbao.

The offices of Xiaosheng Youfu (XSYF) were empty of staff on Saturday, but crowded with users discussing what their next move will be. Some said they had already gone to the police.

The head of Qianbao, which has a similar model to XSYF, had turned himself in to Nanjing police for “alleged crimes” related to illegal fundraising, according to a statement that appeared on Qianbao’s website on Dec. 27.

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