An unlicensed gold and precious metals trading platform based in Shenzhen, China, suffered a massive payment default in late January to early February 2026.
The incident sparked rare public protests in the Shuibei area, the country’s main gold and jewelry trading hub, as thousands of investors demanded the return of their funds.
Unlicensed Gold Platform Fails to Pay, Losses Reach Billions of Yuan
The platform, operated by the Jieworui company, accepts investor deposits for the purpose of trading gold and precious metals, including in the form of digital investments as well as physical gold holdings.
However, the sudden surge in global gold prices prompted a wave of simultaneous withdrawals by investors, causing the platform to face a liquidity crisis and fail to meet payment demands.
Due to a shortage of cash funds, the platform imposed a very small daily withdrawal limit, far below investors’ actual balances. This move sparked widespread dissatisfaction, forcing many investors to come to Shenzhen in person to demand an explanation and resolution.
Tens of thousands of investors are estimated to have been affected, with initial losses potentially running into billions of yuan, equivalent to about $1.4 billion.
Some investors have also reported that they have been unable to retrieve physical gold stored on the platform, adding to pressure on management.
Shuibei, known as China’s “jewelry capital,” is home to thousands of gold traders, manufacturers and wholesalers. The incident has disrupted local trading and raised concerns about the stability of the country’s gold supply chain.
The incident has also highlighted the risks of shadow markets, informal trading systems that operate outside official exchanges and are increasingly popular among retail investors, especially during periods of significant gold price volatility.
Analysts say high price volatility has fueled excessive speculative activity, increasing the risk of large losses.
Local authorities are now actively investigating Jieworui’s operations to assess regulatory compliance and track the flow of investor funds. The case is expected to be a catalyst for tighter regulation of unlicensed gold trading platforms in China.
