China s Biggest Gold Market Collapses 20B Vanishes Overnight 100,000 Merchants Lose Everything

Sometimes I really don't even want to talk about this. Today another company in Shuibei disappeared with people surrounding the place. They were trying to move out their goods and things like that but they couldn't because the police were there. Do you know how they ran off? They delayed the delivery of silver by just a few days. In Shuibei there are plenty of silver materials available right? So why delay delivery for a few days? It was obviously just a setup to Some customers who were affected had more than one ton of silver materials tied up. The upstream silver suppliers in Shuibei and Shenzhen are not just one or two companies running away. It has already become a chain reaction. Many people like us, poor middlemen, have suffered huge losses. Some may lose everything they have earned over their entire lives. Guys, you have to get our money back. Please hurry and recover our money. I really can't take it anymore. I can't even stand up now. If we still can't get this money back, I won't have any way to survive. My heart condition has flared up. Please hurry and get the money back. How badly was this woman crying and how much money did everyone lose? Simply put, try to choose businesses with physical stores and actual inventory. Places that can deliver to you right away. The silver and gold markets are not doing particularly well right now, but if you want to buy, make sure you pay and receive the goods at the same time. Don't just pay a deposit to place an order. Don't get involved in these prepayment deals. Right now the price of silver materials is one price after three days, another price after five days, and another price after a week. Businesses operating this kind of futurist model will eventually run away. It really hurts so much. It feels like a knife has been driven into my heart, like I've fallen into a bottomless pit. Even breathing hurts. How strong can I really be? I don't have an extra heart. I'm a person too. I cry while trying to hold back my emotions, but eventually they would come crashing out all at once. I know crying won't solve anything, but crying is the only way I have to let it out. Recently, several precious metal trading firms in Shenzhen's Shuibei area have faced major failures and payment crises drawing market attention. The incident involves large amounts of money, and some believe traders and investors could suffer significant losses. Many industry participants and investors are now on high alert. Girls, you must choose local businesses. This time, the Shenzhen silver material company that ran off was called Zhenfu International. They disappeared with more than 1 billion yuan. One of our fellow traders from Henan said he lost 6 million yuan. He said this one incident took everything he had and put his life on the line. Think about it. Even if he earned 50,000 yuan a month, how many months would it take to make back 6 million yuan? If Zhenfu International cannot provide compensation, the consequences will be unimaginable. So please, make sure you choose local businesses. The incidents happening in Shenzhen's Shoubei recently have been bigger. The incidents happening in Shenzhen's Shuibei recently have been bigger and more shocking than the last. The losses being revealed keep reaching new levels. On my way back two days ago, I heard that a fellow silver trader in Shuibei has suffered a collapse involving 140 million yuan in forward purchase payments. Yesterday, while taking the high-speed train back to Shenzhen, before I even arrived, I heard that another silver material supplier in the same industry had suffered a massive loss involving 2 billion yuan. The amounts involved are now measured in billions of yuan and those numbers alone are shocking. This silver materials collapse is different from previous cases. First, the amount of money involved is extremely large. Second, many of the victims are fellow Shuibei traders. Many traders chased small price margins of 0.1, 0.2 or 0.3 yuan without realizing that the other side was targeting their entire investment. These dishonest businesses use the strategy of waiting patiently before making a big move. They build trust through normal transactions at first, then collected enough money before taking everything and disappearing. Now, some office buildings are completely empty. Yesterday, I visited two nearby silver suppliers that had disappeared and the offices were completely vacant. The scene was shocking. I wanted to warn those who like buying silver bars with promises of delivery a few days later. Staying away from futures means staying away from risk. Treasure actual inventory. Futures trading can become a bottomless pit. I fell into this trap once during the Lunar New Year. After transferring the full payment to another trader, I urged him for 3 consecutive days to deliver the goods. He kept making excuses and delaying. I didn't waste time arguing with him and went straight to the police. Let me share some inside information with you. Another shuibei company has collapsed, involving a full 2 billion yuan. Just two days ago, there was a case involving 150 million yuan, and today, another 2 billion yuan case has emerged. Oh my goodness. Once again, I want to remind everyone, never try to take advantage of unusually cheap prices, especially when someone offers prices below the market rate. Whether it is gold, platinum, or silver, something is wrong. There has to be a profit somewhere. Either they make money from the metal price, or they make money from processing fees. A business has to make money. If there is no profit, that is actually the most expensive deal. You think you are taking advantage of a small discount, but they are looking at your entire principal. 2 billion yuan. Think about it. Now, the Cuiju police station in Shuibei is once again packed with merchants seeking compensation. Honestly, when you buy something, don't trust businesses that promise to deliver many days later. They should either deliver the same day or the next day. When I heard this news today, all I could do was let out a long sigh. These kinds of incidents have happened so often in Shuibei over the past few years. They just keep happening. According to Chinese media reports, on July 9th, a woman surnamed Chen from Fujian discovered a silver trading company called Kaifei Jia on Douyin. After monitoring the company for some time, she purchased more than 70,000 yuan worth of silver bars through online payment. Since the company had a physical store in Shuibei and many customers, she decided to leave the silver store at the shop, planning to sell it after silver prices increased. However, on July 7th, Chen suddenly received a notice in the WeChat group saying the company had paid deposits to upstream suppliers but failed to receive the goods. As a result, the company was short of funds and could no longer deliver products or issue refunds. Many consumers were affected. Chen said about 150 victims had registered in a rights protection group through a sign-up list. The largest individual claim was 9 million yuan, while the smallest was 6,000 yuan. Based on the list, a reporter estimated the total losses among these consumers at between 65 million and 72 million yuan. The silver bars purchased by Chen came from Shenzhen Kaifei Dao Jewelry. The company is a sole proprietorship limited liability company, with Tang Rui as its legal representative. On the afternoon of July 9th, reporters contacted Tang Rui. He said the company had transferred funds to an upstream wholesaler Yuan Yangchui Jewelry and Jade Store through deposits and final payments in several batches. The business operator is Xu Yindong. Tang estimated that the total transfer exceeded 40 million yuan. He said the upstream supplier failed to deliver the goods, and his company was also a victim. Tang said that on July 6, he went to the agreed location to collect the goods at the supplier's request. However, after payment was made, he never received the products. After repeated delays from the supplier, the company reported the case to police. He is now preparing evidence to help authorities trace the flow of funds. According to transfer records provided by Tang, from June 6 to July 5, 2026, he made 26 transfers to Xu Yindong, which transfer ranged from 100,000 yuan to 2 million yuan. In a consumer WeChat group, Tang explained, all of our orders were prepaid purchases for physical silver raw materials. We only earned normal trade service fees. We did not engage in market speculation or price difference bettings. All funds were specifically used to purchase raw materials from upstream suppliers. The Kaifei Jiao case is only one example. Following the Jiewuorui incident, similar risks have emerged again in Shuibei, raising concerns about the industry's vulnerabilities. A victim of the Jiewuorui incident recently posted a video saying, Today marks exactly 170 days since the Jiewuorui collapse in Shoubei, Shenzhen. To be honest, this was a major financial failure that affected so many people, with countless families being dragged into hardship. Many people believed that after such a painful lesson, the cost of businesses running off in Shuibei market would become much higher. They thought that after such a major incident, merchants in Shuibei would no longer dare to easily deceive customers or simply take money and disappear. But the reality today is deeply disappointing. Even with a case as serious as Jiewuorui right in front of everyone, similar financial failures are still happening in Shuibei again and again. Why do these incidents continue despite repeated efforts to stop them? The main reason is simple. The cost of running off is just too low. Victims have almost no way to defend their rights. Trying to seek compensation is extremely difficult. All they can do is watch helplessly as their hard-earned money gets delayed again and again. By now, many businesses have already figured out this pattern. They know there are loopholes they can exploit, which is why they dare to take money from customers with little hesitation. Shuibei is located in Shenzhen's Luohu district. The area covers only about 3.5 square kilometers, but it plays a major role in the precious metals industry. It is home to more than 7,000 gold, silver, and jewelry businesses, with annual transaction exceeding 300 billion yuan. It is one of China's and the world's major gold trading centers. Many gold necklaces and bracelets sold at large shopping malls can be traced back to suppliers in this area. In recent years, as online trading has expanded, some businesses have moved beyond traditional physical transactions and launched online precious metal trading platforms covering sales, recycling, and processing services. At the same time, the industry has long used a high-leverage business model of locking prices with deposits and shipping after full payment. Leverage ratios often reach 20 to 50 times. In addition, trust-based transactions relying on personal relationships were common, creating risk. On January 18, Shenzhen's major gold pricing platform Jiaworei suddenly became unable to process withdrawals, with more than 3,000 people waiting in line. At the time, customers could no longer reach the company's legal representative or management. After online withdrawals failed, many consumers went to Jiaworei's location in Shuibei, Shenzhen. The main figure involved was a man using the online name Diamond Aten, identified as Zhang Zhiten, the head of Shenzhen Jiaworei Jewelry. Gold has traditionally been viewed as a relatively stable investment, but Zhang Zhiten turned it into a product aimed at ordinary consumers that functioned more like a betting system. His model worked this way. Customers did not need to buy a full gold bar. Instead, they only paid a deposit of more than 20 yuan per gram to bet on whether gold prices would rise or fall. Although it sounded simple, the structure carried high leverage risk. Since one gram of gold is worth several hundred yuan, a payment of just over 20 yuan allowed customers to participate in the full price movement, creating leverage of several dozen times. More importantly, the model did not involve actual gold trading. It was based on betting on price movements. If customers predicted prices would rise, they placed a bet on an increase. If prices rose, the platform paid the difference. If they predicted a decline, the platform also settled based on the price difference. Transactions could be completed and settled on the same day with no fees charged. The platform also claimed that if customers made the wrong prediction, they would only lose their deposit. This made the system appear like a low-risk investment. However, people familiar with financial markets said that this was not a normal gold transaction, but more like an online gambling model. Legitimate future exchanges only provide a platform for buyers and sellers and do not participate in the trade themselves. They mainly earn revenue through transaction fees. Zhang Zhiteng, however, not only participated in the system but was accused of turning it into a structure similar to a Ponzi scheme. When new investors' money was no longer enough to cover earlier losses, the funding chain collapsed and the scheme could not continue. On January 18, the platform failed completely. Only then did the 100,000 investors realize that their money had never entered the gold market. Instead, it had gone directly to Zhang Zhiteng's personal accounts and was allegedly spent, transferred, or misused. After the collapse, the platform's proposed compensation plan also drew criticism. Investors seeking to recover their money were told they could receive only 20% of their original investment. For example, someone who invested 400,000 yuan could only receive 80,000 yuan back. On May 6, 2026, Shenzhen's Luohu Police announced that Zhang Zhiteng, the company's actual controller, had been arrested. The case involved about 13.3 billion yuan and affected more than 100,000 people. The scale suggested that the problem went beyond one company and involved the entire business model. Many of the 100,000 victims believed until the final moment before the collapse that they were involved in one of the safest investments, buying gold as a hedge. But they later found out their money had never been used to buy even one gram of actual gold. Instead, it had allegedly been used in a large-scale betting operation, leaving investors with heavy losses. The incident also revealed that many so-called gold-trading businesses were not actual spot transactions but high-risk bets using customers' funds. If the bets went well, the platform earned profits. If they failed, the platform shut down and disappeared. Besides Jiaworei, another Shuibei company, Hechengxin Silver House, also faced a payment crisis during the same period. In 2025, silver prices rose sharply. Without proper risk hedging, the company bet that prices would fall, causing its restocking costs to increase significantly. The resulting cash flow problem left it unable to deliver precious metals materials ordered by merchants. The incident involved more than 10 million yuan with more than 350 merchants seeking compensation. Zhao Chen, a victim of the Hechengxin Silver House incident, described how the transactions worked. He said that when customers ordered gold or silver bars, they usually had to pay a deposit first. Some paid one-tenth, some paid half, and some paid the full amount. Without a deposit, sellers often considered buyers not serious and would be unwilling to help arrange the purchase. But this system, based on personal trust and experience, became a major risk factor when problems emerged. Some new customers or buyers from outside the area saw that a company had a large store and had operated in Shuibei for years. They assumed the business would not disappear, so they paid full amounts or large deposits and eventually suffered major losses. Zhao Chen said that no one starts a business planning to break trust, he said. With the current difficult economic environment and limited room for businesses to survive, the collapse of Hechengxin Silver House may only be one example. The biggest lesson from the Shuibei incident is that when a market promotes the idea of profits, ordinary people's money can become a target. This time, the promise came in the form of gold and silver. Next time, it could take another form. Greed and fear remain the tool most often used to exploit investors.