When Cao downloaded the Qiangqiantong app, he definitely by no means anticipated it might damage his life. So Cao invested the equal of $11,600 — his whole financial savings — with Qiangqiantong. And why not? The app claimed to supply superb funding alternatives, with excessive returns and little threat. As an alternative, this June, the corporate shut down. Now Cao doesn’t know if he’ll ever see his cash once more. The Washing Submit studies:

Over the previous decade, hundreds of thousands of traders sunk their money into hundreds of firms like Qiangqiantong (which roughly interprets to Get Wealthy Fast) and others with names like Cash Pig and Qianbao, or Pockets.

The guarantees have been the identical: regular development, large dividends and an opportunity for traders to place monetary worries behind. Buyers lapped it up. It was as soon as among the many largest small-investor money flood on this planet, with as a lot as $200 billion driving on P2P desires.

Some state-owned banks even helped facilitate funds, and authorities officers spoke of among the P2P firms in glowing phrases.

However since June, tons of of upstart funding firms have gone bust — many falling sufferer to credit score runs, dangerous bets or the identical Ponzi-scheme unraveling that introduced down fraudsters equivalent to Bernie Madoff.