Jieworui Implodes: $19B In Gold Investments Frozen As Investors Face Massive Losses

In Brief

The collapse of Shenzhen-based gold trading platform Jieworui has left over 150,000 investors with frozen assets, minimal repayments, and ongoing legal disputes amid doubts about the platform’s asset claims and management practices.

A Shenzhen-based gold trading platform, Jieworui, has collapsed after operating what amounted to a leveraged speculative scheme with no physical gold backing, leaving more than 150,000 investors facing losses and seeking to recover their funds. The situation has escalated as investors reject a proposed repayment plan that would return only a fraction of their principal in exchange for relinquishing all legal claims. The platform has suspended withdrawals and halted deliveries of gold, effectively freezing approximately $19 billion in investor assets, with affected users reportedly offered just 20% compensation.

Jieworui was headquartered in Shuibei, China’s largest gold and jewelry trading district, and attracted a large retail customer base through zero-fee gold exchanges, competitive buyback rates, and a product marketed as “pre-set price trading,” which allowed users to lock in the price of a gram of gold with deposits as small as $4. In reality, this system operated as unlicensed options trading. The platform assumed the opposing side of every user position, with leverage reportedly reaching up to 40 times. No physical gold was exchanged, and the platform’s liabilities grew unsustainable when gold prices rose, as it owed users the difference between their virtual positions and market value.

Restrictions on withdrawals began around January 20, initially limiting daily withdrawals to $69 or one gram of gold. Thousands of investors, including many who traveled from other provinces, gathered outside Jieworui’s Shenzhen offices to demand access to their funds, leading to reported scuffles with local police. Media reports indicate that most of the affected investors are housewives and working-class individuals, highlighting the widespread impact of the platform’s collapse.

Repayment Efforts Fall Short As Investors Question Asset Claims And Payout Fairness

The local government established a special task force and announced on January 31 that Jieworui had begun processing repayments following the liquidation of assets and the raising of additional funds. Authorities also commissioned a third-party audit, claiming that the widely reported figure of 13.4 billion yuan in unpaid funds was “significantly exaggerated.”

Despite these official statements, the reality for investors has been far less reassuring. Jieworui initially presented two repayment options: a one-time payment equal to 20% of the principal, or 40% spread over 12 monthly installments. In practice, the actual amounts disbursed have often fallen well below even the 20% threshold. One investor from Henan who had invested $5,100 submitted two separate redemption requests, receiving an initial offer of $1,219 and a subsequent offer of only $244. Another account holder with over $44,400 in cash, 5.2 grams of gold, and 1,000 grams of silver was offered slightly more than $2,800, representing roughly six percent of her total holdings.

Investors who had purchased platinum through the platform have been entirely excluded from the repayment process, fueling concerns that Jieworui may never have held the physical metal. These developments underscore ongoing doubts about the platform’s asset claims and the fairness of its repayment practices.

Investors Resist ‘Criminal Pardon’ Agreements Amid Ongoing Repayment Standoff And Investigation

Compounding investor frustration, Jieworui’s repayment process requires participants to sign three separate agreements, including a so-called “criminal pardon letter,” which multiple investors report would waive any future legal claims against the platform, regardless of the amount ultimately received. “Even after signing, there’s no guarantee you’ll actually get the money. And you give up the right to sue. For what — 1,700 yuan ($236)?” an investor from Zhengzhou told local media.

Many account holders have declined to sign the agreements, resulting in a standoff with the platform, with several indicating plans to pursue independent legal action.

Jieworui’s social media presence has been removed, calls to the company have gone unanswered, and attempts to contact its owner, Zhang Zhiteng, have been unsuccessful. Authorities from the Luohu District task force stated that they are continuing to register victim claims, and the investigation into the platform remains active.