On July 28, the Shenzhen Branch of the People's Bank of China (PBOC) and the Shenzhen Branch of the State Administration of Foreign Exchange (SAFE) held a press conference for the first half of 2026, detailing the city's financial operations. During the event, authorities highlighted efforts to actively guard against illegal financial activities in the gold market and the digital currency sector.
The PBOC Shenzhen Branch reported that in the first half of 2026, the city implemented a three-pronged approach to combat illegal financial activities related to gold and digital currencies. This included strengthening work deployment and oversight, issuing widespread risk warnings, and conducting in-depth public education campaigns.
Specific measures included convening a special working meeting with local Financial Institutions. At this meeting, the central bank directed these institutions to leverage their role as "early warning systems" by monitoring and flagging suspicious financial flows associated with illegal activities. Authorities also cleaned up corporate registration records to remove any wording related to virtual currencies, strengthening control at the source of these illicit activities.
Furthermore, the PBOC Shenzhen Branch, along with several other departments, jointly issued a document titled "Public Notice on Further Regulating the Operational Conduct of the Gold Market." This notice explicitly requires gold and jewelry businesses to strictly avoid any illegal or non-compliant practices. In addition, authorities conducted public outreach campaigns in key commercial areas like Huaqiangbei and Shuibei, distributing "Risk Warning Notices on Preventing Illegal Financial Activities in Virtual Currencies." They also guided Financial Institutions to conduct ongoing education through both online and offline channels, aiming to routinely warn the public about risks and improve their ability to identify threats.
Gold, as a globally recognized hard asset, holds inherent value and high liquidity, while digital currencies are characterized by decentralization, making cross-border flows difficult to trace. These features have made both assets common vehicles for illegal financial activities. Such activities, including money laundering and fraud, tend to escalate during periods of significant price volatility in gold and digital currencies. For example, after a sustained rally in 2025 that repeatedly set record highs, the international gold price experienced a sharp crash in 2026, fueling a frenzy in gold trading and spawning numerous market irregularities.
Shenzhen's Shuibei area is a nationally renowned gold trading hub. In late 2025, Shenzhen Jiewo Rui Jewelry Co., Ltd., located in this district, encountered operational difficulties. The company defaulted on services that allowed customers to deposit funds or consign gold for sale or exchange. The case subsequently led to a criminal investigation, with the company's actual controller and others being placed under criminal coercive measures.
According to Bai Wenxi, Vice Chairman of the China Enterprise Capital Alliance, the PBOC Shenzhen Branch's decision to prioritize the gold market and digital currencies in its crackdown on illegal finance sends a clear signal of tightening oversight. By positioning Financial Institutions as frontline monitors, large fund transfers, abnormal account activity at gold and jewelry companies, and transfers linked to digital currency addresses can be detected in real-time. The release of multiple industry standards also serves as a strong deterrent to gold and jewelry businesses.
Bai Wenxi acknowledged that the real difficulty in combating illegal financial activities lies in identification. For instance, a gold shop in Shuibei might simultaneously conduct legitimate wholesale gold business and an illegal "off-book" gambling operation. To truly expose such activities, regulators must be able to see through to the underlying transaction structure. He noted that Shenzhen's emphasis on the "early warning" role of Financial Institutions is a strategic move to focus on the critical link of "capital flow."
Indeed, police case reports indicate that despite repeated regulatory warnings, new and evolving illegal schemes involving gold and digital currencies continue to emerge, often linking the two assets. In a recent telecom fraud case cracked by Shanghai police, both gold and digital currencies were involved. The criminal chain showed fraudsters luring victims with promises of high returns from stock or digital currency investments. One victim was tricked into transferring a total of 5.94 million yuan. Police investigation revealed the funds were not invested but instead paid directly to a gold shop in Shenzhen's Shuibei area. The perpetrators then obtained gold bars via courier or express delivery, quickly moving the gold out to "launder" the fraudulent funds. The money-laundering gang was eventually arrested.
Bai Wenxi believes that Shenzhen has established a comprehensive "three-in-one" mechanism for tackling illegal financial activities related to gold and digital currencies, which includes special working meetings, public warnings, and public education. He expects this effort to proceed on a quarterly basis, with intensity adjusted according to risk levels. The joint warning against gold and digital currencies also suggests that Shenzhen will simultaneously intensify its crackdown on complex scams, such as those combining "blockchain and gold" or "digital currencies and physical assets."
Bai Wenxi also cautioned consumers to conduct gold purchases and related investments through formal channels, warning them to be wary of false promotional lures like "stable gold value with high returns." He reiterated that all activities involving digital currencies within China are considered illegal financial activities, and participants not only bear their own losses but also risk becoming implicated in fraudulent schemes.