Shenzhen Cracks Down on Risky Gold Trading Amid Wave of Defaults
Listen to the full version
Financial regulators in Shenzhen moved to curb illegal gold trading activities, targeting speculative schemes that have contributed to a wave of defaults shaking the city’s jewelry hub.
The Shenzhen Local Financial Regulatory Bureau, in collaboration with other government departments, issued an order Friday for companies to halt unauthorized gold trading practices such as “pre-fixed pricing,” leveraged trading, and deferred settlements. The crackdown is in response to the surge of shadow banking activities within the Shuibei market, where skyrocketing gold prices have exposed the vulnerabilities of dealers acting as unlicensed futures brokers, leading to substantial losses for retail investors.
Unlock exclusive discounts with a Caixin group subscription — ideal for teams and organizations.
Subscribe to both Caixin Global and The Wall Street Journal — for the price of one.
- RELATED
- DIGEST HUB
Digest Hub
Back
- Shenzhen regulators cracked down on illegal gold trading, banning unauthorized schemes like pre-fixed pricing, leveraged trading, and deferred settlements in response to a rash of dealer defaults.
- Major dealer Jieworui faced a liquidity crisis in January 2026, limiting withdrawals and offering clients steeply discounted settlements after failing to meet obligations.
- Authorities are investigating unlicensed futures-like activities, warning violators of potential criminal charges as inspections of Shuibei jewelry platforms continue.
- Jieworui
- Jieworui, a prominent gold dealer, faced a severe liquidity crisis in January 2026. Led by Zhang Zhiteng, the company attracted investors through social media, offering fee waivers and competitive pricing. They operated an "empty agreement pricing" model, allowing clients to trade virtual balances and short the market without holding physical gold. The scheme collapsed when Jieworui began rejecting withdrawal requests on January 19.
- Yundiandang
- Yundiandang is a gold dealer operating in the Shuibei market in Shenzhen. Following a liquidity crisis that impacted other dealers, Yundiandang suspended withdrawals on January 31, citing "compliance violations." The company offered its clients discounted settlement options, similar to another distressed dealer, amidst a wave of panic-driven withdrawals.
- Late 2025：
- Authorities warned that jewelry dealers are not licensed financial institutions and cannot manage assets or offer unauthorized investment products.
- January 2026：
- Jieworui experienced a severe liquidity crunch after drawing investors via social media and apps using virtual balances and speculative models.
- January 19, 2026：
- Jieworui began rejecting withdrawal requests from clients.
- January 20, 2026：
- Jieworui imposed a daily withdrawal limit of 500 yuan per client, with a total daily payout cap of 10 million yuan.
- By January 25, 2026：
- Jieworui applied for government supervision to liquidate assets, admitting it could not meet its obligations.
- January 26, 2026：
- Jieworui proposed a restructuring plan: a one-time 20% settlement within seven days or a 40% settlement over one year.
- January 31, 2026：
- Yundiandang, another dealer in Shuibei, suspended withdrawals and offered discounted settlements due to compliance violations.
- February 9, 2026：
- The Shenzhen Local Financial Regulatory Bureau and other authorities ordered companies to halt unauthorized gold trading practices, targeting illegal schemes.
- MOST POPULAR
Sign in with Google
Sign in with Facebook
Sign in with 财新