A Chinese gold trading platform has just frozen 19 BILLION $ in assets. Thousands of investors can no longer withdraw their funds. The platform is offering 20% compensation of the initial capital. The platform (Jiewurui / JWR in Shenzhen) is facing a classic run/redemption crisis after gold's rally triggered mass withdrawals. Founded in 2014 as a legitimate gold trader, the company operated physical storefronts and gained trust through competitive pricing and aggressive social media marketing. But behind the familiar interface of jewelry commerce lurked a betting mechanism. The platform's "pre-pricing" system allowed users to lock in gold or silver prices for future purchase or sale with deposits as small as 20-30 yuan per gram — creating leverage as high as 40-to-1, compared to the Shanghai Gold Exchange's regulated 14% margin requirement.

South China Morning Post

China’s ‘gold fever’ sparks US$1 billion scandal as trading platform collapses

Chinese platform JWR faced a liquidity crisis as investors rushed to cash in on surging gold prices, leaving customers billions of yuan out of pocket.