Friendship to Fraud: How a Dance Session Led to a ₹28 Lakh Stock Scam in China

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China’s cyber fraud networks target individuals with fake stock investment schemes, leading to significant financial losses.

Friendship at Dance Session That Led to a ₹28 Lakh Stock Scam in China

Beijing: A highly organised cyber fraud network in China is targeting individuals with promises of stock market investments and rapid returns. In one instance, a woman encountered an acquaintance during a square-dance session who claimed to be an experienced stock trader. This individual gradually built trust with the victim, persuading her to invest 200,000 yuan, approximately ₹28.3 lakh. A timely alert from China’s National Anti-Fraud Center and an in-person police visit prevented further losses.

“A timely alert from China’s National Anti-Fraud Center and an in-person police visit prevented further losses.”

Fake Investment Apps Used to Build Trust

Investigations reveal that illegal stock-recommendation and investment fraud is no longer the work of isolated actors. Organised networks operate through distinct teams handling lead generation, customer service, technical operations, and fund transfers. Team members often do not meet in person and communicate exclusively through digital channels.

Lead-generation teams identify potential victims via social media posts, livestreams, and short videos promoting high stock-market returns. Customer-service teams then engage victims through private chats and groups to establish credibility. Once trust is established, victims are directed to fraudulent platforms. Fake trading applications are central to these schemes. Stock prices, account balances, and profit/loss metrics within these apps are not linked to real market data. Fraudsters manipulate backend systems to display fabricated results, encouraging victims to invest larger sums. In this case, the scammer initially shared screenshots of purported high returns, reinforcing the victim’s confidence.

The Second Trap Begins When Victims Try to Withdraw Money

After a victim deposits a significant amount, fraudsters may delay or block withdrawal requests. Victims are often told that additional fees, taxes, or verification steps are required before funds can be accessed. This creates a cycle where victims are pressured to invest more to resolve the issue.

Cybercriminal Networks Rapidly Split Fraud Money Across Multiple Accounts

Cybercriminal networks avoid keeping stolen funds in single accounts. Once money is received, it is quickly transferred through multiple mule accounts, third-party payment platforms, and alternative financial routes. Funds may traverse regions before being moved overseas. Investigators have identified methods involving underground banking systems, virtual currencies, and fraudulent cross-border trade transactions. These layered transfers complicate tracking and recovery efforts.

China Cracked 258,000 Fraud Cases in 2025

China has intensified enforcement against telecom and online fraud. In 2025, law enforcement agencies resolved 258,000 telecom and online fraud cases. Authorities arrested 542 financiers, masterminds, and key operators during targeted operations. Over 3.6 billion fraudulent phone calls and 3.3 billion deceptive text messages were blocked. Emergency measures froze 217.07 billion yuan, roughly ₹30.7 lakh crore, in suspected illicit funds. Police and agencies conducted over 6.747 million in-person visits to warn potential victims and mitigate risks.

258,000 telecom and online fraud cases resolved in 2025
542 financiers and key operators arrested
3.6 billion fraudulent phone calls blocked
217.07 billion yuan frozen in illicit funds

Experts advise investors to remain vigilant against claims of guaranteed stock-market profits, principal protection, or exclusive insider information. Any requests for large upfront payments or urgent transfers should be treated as red flags.