Chinese police warn of digital Yuan scams.

The Chinese police have issued a warning that there has been an increase in scams related to the digital yuan, as the country’s rollout of its central bank digital currency (CBDC) gathers pace.

According to the state-run news outlet CCTV (via Xinhua), officers in Shandong Province have reported a rise in digital yuan-themed “fraud.”

They have stated that a recent scam has affected “tens of thousands of people.”

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The police have said that “some criminal suspects” have taken advantage of the e-CNY adoption drives and have “seen opportunities” to scam people.

Authorities have said that many fraudsters have developed apps that look authentic and use digital yuan logos downloaded from official sites. They then use these apps to trick people into thinking they can make easy money by downloading them and sending funds to what they believe are legitimate financial firms. However, these firms turn out to be private accounts, many of which are based overseas, making it difficult for the Chinese authorities to recover the victims’ funds.

The Shandong police have explained that scammers are infiltrating public group chats offering “digital yuan credit lines” that can be used to purchase goods on e-commerce platforms such as Taobao and JD.com.

The police officers have warned citizens to be cautious of digital yuan-themed apps that are not distributed by the central People’s Bank of China (PBoC) or major state-run commercial banks.

Chinese Police: Digital Yuan-themed Scams Becoming More Commonplace

The media outlet quoted a victim named Zhang, who explained that scammers had convinced him to pay an initial “registration fee” of just under $40. In return, he was told that he would soon receive a credit line worth thousands of USD and could increase it further by “recruiting new members,” which he did.

He stated:

“My credit line eventually reached [around $700,000]. But I [eventually] found that the credit line was not available. I couldn’t use it to buy goods, and I couldn’t withdraw any cash.”

Zhang added:

“In the end, I couldn’t open the app at all. My friends were in the same situation as me. I felt that I’d been cheated, and then I told the police about it.”

The police have identified an app named Digital Credit (literal translation) which they say is “counterfeit” and has been “illegally developed by scammers overseas.” They have also stated that the scammers have used “forged PBoC documents and real digital yuan logos to confuse the public.”

Last week, Chinese charitable institutions announced that they had started accepting digital yuan donations from both corporate entities and private individuals.