The sharp decline in international silver prices over the weekend, which fell by 26.93% in a single day, has put China-UBS Fund Management under intense scrutiny. Earlier this year, silver prices had surged by more than 60%, attracting significant capital inflows into the market's only silver LOF fund. Since December 19, China-UBS Fund Management has issued four separate announcements restricting purchases of the fund, indicating a state of disarray. On February 2, some investors exited their positions, causing the on-market silver LOF to hit the daily downside limit, while the off-market version recorded a historic single-day decline of 31.5% for public funds. The sharp drop was attributed to a post-market announcement that changed the valuation benchmark, resulting in losses for fund holders. China-UBS Fund Management’s decision reflects both a gamble and a panic over liquidity risks. The incident has exposed flaws in the fund’s design and serves as a warning to the industry: information disclosure should be transparent and timely, investor protection must be integrated into decision-making processes, and fund managers should establish contingency plans and prioritize investor education.